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More capital for high impact affordable housing fund

Abbey Place

CBRE Global Investors has raised a further £120m equity for its UK Affordable Housing Fund (AHF) having deployed most of the £250m of initial capital raised in 2019 ahead of schedule.

The additional capital provides scope to deliver over 2,000 homes as projects are completed and occupied. So far AHF has made 12 investments across the UK and is in advanced due diligence on a further five investments.

Recent deals include the forward funding of the 245-home Abbey Place scheme, South East London, the acquisition of the affordable element of 50 homes at a development in the centre of Berkshire town Slough, and the forward funding of a scheme of 121 shared-ownership and affordable-rented homes in Salisbury Wiltshire.

The AHF was one of the first UK unlisted funds to take institutional capital into affordable housing across the UK.

Fund attractive to local government pension funds

A number of UK local government pension scheme (LGPS) investors, such as Hampshire County Council Pension Fund, Rhondda Cynon Taf Pension Fund, Wiltshire Pension Fund, Surrey County Council Pension Scheme, Bedfordshire Pension Fund and Royal Borough of Greenwich Pension Fund, were early adopters.

“The fund combines attractive return characteristics for investors seeking stable returns over the very long-term and a consistent income profile along with a social conscience,” said CBRE Global Investors’ head of LGPS partnerships Alice Wilcox.

DJ Dhananjai.

The fund’s portfolio includes schemes with registered providers such as VIVID, Oak Housing and Pinnacle Group.

CBRE GI said an important aspect of AHF is its proprietary social impact framework, which was created with support from social advisory firm Good Economy which specialises in measuring impact.

The framework measures the impact that investments are likely to deliver for society, which institutional investors increasingly want to see from their investment strategies.

“We have been able to support communities across the UK by working with local authorities and registered providers to fund the provision of over 1,000 much-needed affordable homes with the potential to house over 2,500 people,” said fund manager for AHF, DJ Dhananjai. “By working collaboratively with operators in the sector, we have succeeded in increasing housing development and delivery pipelines, while enhancing services offered to occupiers.”