Real Estate Equity – UK Community Housing
The UK Community Housing Strategy (the ‘Strategy’) is a real estate strategy that seeks to generate financial and social returns by investing in the UK affordable housing sector.
- The strategy is actively managed and not managed in reference to a benchmark
- Affordable homes are properties that are rented or sold at a discount to market rate
- The public sector is not building enough affordable homes
- The strategy develops housing stock that is predominantly leased to UK councils and housing associations
- It is managed by a dedicated team of investment professionals with long-term experience in the sector
Approach
The UK has experienced a significant, long-term mismatch between supply and demand in the housing market. This has led to an affordability crisis, impacting households earning the median income and below. We estimate that the supply of completed affordable homes lags the demand by around 100,000 homes per year. By deploying institutional capital to address this shortage of affordable homes, we aim to generate attractive returns for investors and drive positive impact.
We believe affordable housing offers reliable long-term, diversifying returns and, because our leases are typically inflation indexed, a useful inflation hedge. Long leases ensure a very low volatility returns stream, and our main counterparties are A rated credits and above. There have been no Council or Housing Association defaults.
A shortage of affordable homes is more than a supply vs demand disequilibrium. It means instability and unsuitable living conditions for working people across the UK. Ensuring that more affordable homes are built addresses this shortage and creates a real positive impact. To maximise impact, we have implemented a transparent, quantifiable "Impact Framework” that all new opportunities are assessed and reported against.
The GPM Community Housing Strategy is managed from our London office, by an investment team with over 50 years of aggregated experience in the UK affordable housing sector. This deep sectoral knowledge is crucial to our sourcing and evaluation of potential developments.
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