PfP Capital has secured an additional £20m equity commitment from Strathclyde Pension Fund (SPF) for its New Avenue Living affordable housing strategy.
The social value and ESG-focused real estate fund manager has already delivered 511 energy efficient homes in major Scottish cities with a further 590 under development and SPF’s investment will support the delivery of the next phase of affordable housing for rent in the country.
The latest commitment takes SPF’s total investment in the fund, which has a mandate to deliver 1,500 high quality, sustainable and energy efficient affordable homes for rent, to £45m.
William Kyle, MMR fund director for PfP Capital said: “By bringing together like-minded and highly experienced counterparties, we see affordable, mixed-tenure housing communities with high sustainability credentials providing a blueprint for future housing delivery in the UK. For patient capital, and now more than ever amid the search for returns in today’s changed market environment, this type of real estate investment offers a rare combination of social value alongside competitive and stable long term, day-one returns.
“The continued support of Strathclyde Pension Fund is testament to our strong credentials as a differentiated social value fund manager with a singular strategy, track record of delivering successful schemes and communities, and the not-for-dividend group status enables PfP Capital’s profits to be recycled onwards for more social value via Places for People.
“Given our structure and approach, we believe we are uniquely placed to play a major role in helping to alleviate the chronic housing shortage in Scotland alongside our partners, and very much hope more institutional investors will join to accelerate this critical housing provision.”
Ian Jamison, investment manager at Strathclyde Pension Fund, added: “We are delighted to be increasing our commitment to PfP Capital’s pioneering New Avenue Living affordable housing strategy, via our direct impact portfolio. The strategy meets our requirement to achieve satisfactory, risk adjusted financial returns alongside real social value through the development of additional, high-quality affordable homes in Scotland.
“We also recognise the additional benefit our investment has, with profits generated by PfP Capital being recycled to its parent, the large, not-for-dividend social enterprise Places for People Group to further its social objectives. We continue to enjoy working closely with PfP Capital’s knowledgeable and specialist team.”
