CBRE buys and develops 522 affordable rental homes in UK

CBRE UK Affordable Housing Fund (AHF), a fund sponsored by CBRE Investment Management, has committed capital to acquire and develop 522 affordable rental homes through forward funding and forward commitment transactions in the last 12 months.

Andrew Davey, Head of Liability Matching Solutions & Affordable Housing, CBRE IM

“The shortage of affordable homes in the UK is well documented and we believe that AHF is one solution to use institutional capital to fund the shortfall of affordable and sustainable housing,” said Andrew Davey, head of liability matching solutions and affordable housing, CBRE IM. “Many investors have their own social impact goals and, as AHF is independently audited, it provides investors with the assurance that social impact objectives are met alongside a financial return.”

AHF is funding 294 regulated rent homes at Wood Wharf, part of the Canary Wharf Group residential development in central London, and delivering 67 regulated rent and 11 shared ownership homes across two sites in Exning, Newmarket and Weston, Spalding.

The fund is also providing 54 regulated rent and 18 shared ownership homes in Burgess Hill, Sussex, a further 48 regulated rent and two shared ownership units at Wellington Gate, Wantage, and 14 regulated rent and 14 shared ownership homes at Fugglestone in Salisbury, in addition to the portfolio of 185 homes at this site.

An image of the affordable homes at Burgess Hill in Sussex

AHF invests across regulated rent, local affordable rent and affordable-ownership properties delivering measurable social outcomes. It was one of the first UK unlisted funds to bring institutional client capital into affordable housing to deliver social impact.

Through the life of the Fund, about £600 million has been allocated and AHF owns 2,432 affordable homes, of which some are in the most deprived areas in the UK. With the recent capital committed to the provision of new homes, AHF has the potential to house approximately 7,500 people.

As of Q4 2023, equity commitments are £670.5 million with a total of 22 investors, of which nine are Local Government Pension Scheme (LGPS) subscribers. CBRE IM said it is in a unique position to offer LGPS investors the opportunity to leverage a Fund that has UK-wide investments to gain diversified exposure while also offering the ability for LGPS investors to access various solutions to unlock opportunities with a specific local focus.

Since its inception, AHF has partnered with The Good Economy (TGE) to implement an impact framework to measure and manage social impact, including wider ESG performance, providing accountability and transparency.

The impact framework continues to evolve, CBRE said, providing the foundation for every acquisition and a benchmark for all fund-level decisions whilst providing investors with an independent annual audit by TGE, ensuring transparency and avoiding green-washing.