-High growth market is characterised by lack of mid-market, long-term equity funding options–
Author: pandc-admin
HGP provides c. £7.6 million equity commitment for Wales’ first co-living scheme
Housing Growth Partnership (“HGP”), the Lloyds-backed equity investor in the UK Living sector, has committed c. £7.6 million of equity which will support Urban Centric’s acquisition of a former L&G office building in Cardiff, Wales, which it intends to transform into what will be Wales’ first institutional grade co-living scheme.
It represents HGP’s first investment in the co-living sector, as it continues to broaden its exposure across the high-growth UK Living sector in response to existing and prospective partner demand.
Occupying a prime city centre location in close proximity to the central retailing area and Queen Street Rail Station, the EPC-A rated scheme will see the building’s existing core retained, minimising the embodied carbon. The development will comprise 203 studio apartments, designed to appeal to the next generation of residents looking for high quality but affordable rent in the undersupplied city centre.
Initial site work is expected to commence in Q2 once formal planning has been secured, with practical completion expected by Q4 2025.
It represents the first transaction between HGP and Urban Centric, a highly regarded real estate developer with over twenty years’ experience developing mixed use regeneration residential projects across major UK cities.
Reflecting the increasingly important role that UK equity funding can play in bringing forward new schemes and the regeneration of communities, HGP has invested £400 million of equity since 2016, across 156 residential projects with a total GDV of £3.3bn.
Mike Murphy, Investment Director at HGP, commented: “This first investment alongside Urban Centric highlights the ever-growing significance of equity funding in creating, regenerating and delivering vibrant communities and homes that meet an unmet demand for housing in key regional UK cities.
“It also underscores our team’s capability in executing complex equity transactions across the UK Living sector. Co-living in particular is a nascent but fast growing product, as people prioritise city centre living and the infrastructure and social advantages it brings.”
Tom Larkin, Acquisitions Director at Urban Centric, added: “We are very excited to join forces with HGP and deliver Wales’ first institutional grade co-living scheme. Cardiff has all the right credentials to underpin a thriving community aimed at a wide spectrum of occupiers, from mature students and young professionals through to contract workers staying for long periods of time. It’s highly likely that this use class will continue to grow in Cardiff and we are in a fortunate position to set the tone for a best-in-class product that will stand the test of time, while meeting the needs of an evolving population.”
Streets ahead: Briar Homes secures £7m backing to build hundreds of new homes in Scotland
- The 310 new energy efficient homes will be built across three developments, with 66 properties being affordable housing
- The multi-million funding was secured from Bank of Scotland and Housing Growth Partnership (HGP)
Glasgow-based, family-run private housebuilder Briar Homes is looking to develop an initial pipeline of 310 new highly efficient homes (including 66 affordable properties) after securing an initial £7.3 million funding package from Bank of Scotland and Housing Growth Partnership (‘HGP’).
A longstanding client of Bank of Scotland and a key client of Housing Growth Partnership under its Regional Growth Initiative, the developer has secured an initial £5 million Revolving Credit Facility from Bank of Scotland alongside an additional £2.3 million of equity from HGP.
The funds will initially be used to accelerate commencement of three sites in Howwood, Wishaw & Garthamlock, with further sites already identified at Barrhead, Gladsmuir and Kennoway. The equity provided is part of a wider £14m equity commitment between Briar Homes under HGP’s Regional Growth Initiative.
Construction has already started on 10 four-bedroom family homes in Howwood with a further 22 private homes suitable for first time buyers at Tillycairn, Garthamlock also underway. A further 27 private homes, again suitable for first time buyers, and 45 affordable homes will also shortly commence in Newmains, Wishaw.
At Barrhead, the developer is looking to build 39 homes designed for families, while Gladsmuir, near Haddington, will comprise a mix of 27 private and seven affordable homes aimed at families and retirement downsizers. Kennoway is a substantially larger site in Fife where the developer is looking to deliver 140 crucially needed homes to undersupplied first time buyers and families.
Paul Kelly, Managing Director at Briar Homes, said: “Addressing the Scottish housing market’s supply and affordability challenges remains a key priority for Briar Homes, but we can’t do it alone. The overwhelming support of Bank of Scotland and the Housing Growth Partnership working together provides us with exactly the financing springboard needed to accelerate a range of much needed new homes across the country catered towards families and those taking their first steps on the housing ladder.
“The facilities aren’t just financially supportive – they also provide certainty and a clear vision to our business as we look to continue to work with our local authority partners through the planning process, doing all that we can to increase the pace of the delivery of new high-quality homes.”
Graeme Steel, Director at Bank of Scotland Real Estate & Housing, said: “At Bank of Scotland, we aspire to contribute to a society in which all households have access to affordable, safe, and sustainable homes in places they want to live.
“The housing market issues are well documented and we are committed to supporting developers delivering more quality housing across Scotland of all tenures.”
Colin Bennett, Investment Director at Housing Growth Partnership, said: “Briar Homes are a trusted long-term partner of HGP and we are delighted to continue to support the business growth plans through our Regional Growth Initiative, which enables HGP to support both Briar’s current sites and those coming through its planning pipeline.”
Briar Homes is a subsidiary of AS Homes (Scotland) Limited, a family-run, Glasgow-based housebuilder with more than 20 years’ experience delivering substantial number of affordable housing provision to the Housing Association market (more than 400 homes in the last two years alone). Briar Homes works in conjunction with Housing Growth Partnership – an investor backed by Lloyds Banking Group and Homes England – to help address housing affordability by increasing the number of new homes built in the UK by SME builders.
HGP passes 10,000 UK home milestone with £5.9 million equity commitment for three residential schemes
-Demand from both developers in the living sectors and regional SME housebuilders for HGP’s unique funding model has grown against restrictive financing backdrop-
Housing Growth Partnership (“HGP”), the Lloyds-backed equity investor in the UK Living sector, has committed £5.9 million of equity to support the delivery of three residential developments in West Derby, Conwy and Kent. It brings the total number of homes that have been, or will be, delivered across the UK using HGP equity to over 10,000, outperforming HGP’s target to reach this milestone by 2025.
The investment builds on HGP’s record 2023, which saw it commit c. £110 million of equity across 30 schemes in the living sectors to deliver c. £815 million of GDV, reflecting the increasingly important role that UK equity funding can play in bringing forward new schemes and the regeneration of communities across the UK.
HGP’s latest investments will enable the accelerated delivery of 105 homes, in what are critically undersupplied UK regions. The schemes, all of which are due to complete in 2025, comprise:
- With Hassett Homes in West Derby, 18 new-build detached and semi-detached homes, alongside 14 converted apartments and townhouses within the Grade II-listed building
- 24 new family homes near Conwy, North Wales, alongside Hall & Co, marking HGP’s first deal in the North Wales region
- A second investment with McGoff Group, to support the development of a 49-unit retirement bungalow scheme in Herne Bay, Kent. The £2.8 million investment is HGP’s first in the retirement living sector in England
Since launching in 2015 with an initial focus on the residential for-sale sector, HGP, which is backed by Lloyds and Homes England, has partnered with 78 developers across 150 schemes, funding the completion of c. 3,750 homes across private for sale, affordable, PBSA, Build-to-Rent, Regeneration and retirement living, and the future delivery of a further 6,400.
Vic Hepburn, CEO at HGP, commented: “These latest equity funding transactions, with a mix of new and existing partners, maintain the momentum of our record breaking 2023. Innovative solutions are required if the UK is to deliver the much-needed housing required, and we are incredibly proud to be playing our part by enabling developers to bring forward schemes more quickly. Passing 10,000 homes funded, a year earlier than planned, is just the start for us as we diversify into new tenures and continue delivering meaningful social impact.”
Kier Property and HGP residential JV acquires development site in Tunbridge Wells
Kier Property and Housing Growth Partnership (‘HGP’), together in Joint Venture, have purchased a 1.46 acre site in Tunbridge Wells from Axa Health. It represents a significant investment by the £80m JV, launched in 2022, with a focus on residential developments on urban brownfield sites.Formerly occupied by Axa Health, the site currently comprises two vacant office buildings, Phillips House and Eynsham House. It is prominently positioned on the corner of Crescent Road (A264) and Mount Pleasant Road, less than five minutes’ walk from Tunbridge Wells train station, which connects to central London in 30 minutes. The site overlooks Calverley Park, close to the town’s main retail centre, in a neighbourhood characterised by an abundance of Grade I and II listed buildings.The Kier Property and HGP JV has remit to deliver 2,000 new homes, both for sale and rent, on brownfield sites in key towns across England.
Rachel Miller, Investment Director, HGP, commented: “The JV’s site acquisition will enable us to revive this central brownfield site to deliver housing for the local community. Strategic partnerships enable us to deploy significant capital and deliver homes at scale, working alongside trusted and experienced partners who are making a positive difference for people and communities across the country.”
Leigh Thomas, Group Managing Director, Kier Property, added: “The acquisition of this site demonstrates our appetite to purchase brownfield sites and repurpose them for residential led mixed-use regeneration. The proposed scheme will deliver much needed sustainable homes designed to the highest standard and will be in keeping and set amongst Tunbridge Wells’ fascinating depth of rich heritage, history and landscape.”
Olympian Homes & Housing Growth Partnership announce Joint Venture to deliver £120 million, 790-bed PBSA scheme
Olympian Homes, the established commercial and residential developer, and Housing Growth Partnership (HGP) have formed an equity Joint Venture (JV) to deliver a 790-bed Purpose Built Student Accommodation Scheme (“PBSA”) in Nottingham city centre. The scheme, which will also include 19 affordable homes, has a Gross Development Value of c. £120 million.
Known as ‘Forest Mill’, the PBSA scheme will comprise 790 beds across three buildings. Features will include a Café & Co-Working Space, games area with table tennis, air hockey, fussball, shuffleboard, private dining, gym, yoga studio, cinema room, gaming booth and a garden terrace. Located on Alfreton Road, the site is just a 13-minute walk from the Nottingham Trent University campus, a 12-minute bus ride from the University of Nottingham Jubilee Campus and a 16-minute walk from the city centre.
The site adjacent to the PBSA blocks will see the delivery of 19 high quality affordable homes. The three-bedroom family homes will contribute to the Council’s housing delivery targets and crucially provide accommodation for residents on low incomes.
Having acquired the site in September 2021, Olympian secured planning in June 2022. RG Construction has been awarded the build contract for the PBSA element and Tanbry Construction the affordable housing element. Enabling works began in July 2023 and main construction will start in December 2023, with completion scheduled ahead of the 2025/26 academic year.
James Lindridge, Development Director at Olympian Homes, commented: “We are thankful for the pragmatic nature of Nottingham City Council in supporting our vision and addressing the supply/demand imbalance of PBSA and affordable homes within Nottingham. We look forward to commencing works onsite, engaging with local stakeholders and contributing to Nottingham’s ambitious growth plans. The transaction is our second Olympian PBSA funding completion of 2023 and demonstrates the high level of investor confidence in the UK PBSA sector despite the turbulent macro-economic backdrop. We have enjoyed working with HGP and believe this will be the start of a strong, long-term partnership.”
Mark Slatter, Chairman of Olympian Homes, commented: “This is a great place making opportunity for a landmark high quality Student Accommodation scheme alongside much needed Affordable Homes and many thanks to all our stakeholders for making this happen in very challenging times.”
Colin Bennett, Investment Director, HGP, added: “Forest Mill is a bold, high specification scheme, with strong amenity that will bring economic growth to the area and create further regeneration opportunities in the city; whilst also supporting the provision of much needed affordable homes. We have built a strong partnership with the Olympian team and look forward to working with them in delivering this scheme and future opportunities.
“Forest Mill is landmark transaction for HGP, representing our third, and largest, equity investment in the PBSA sector to date. Having recently supported new developments in Glasgow and Dundee, we have strong appetite to grow our exposure in the sector, supporting the delivery of high quality schemes in critically undersupplied UK university cities.”
Laurie Marsh, Senior Director at JLL Living Capital Markets, which advised on the both the JV debt and equity financing structuring, commented: “We are delighted to have supported the Olympian team on capital raising for another significant PBSA transaction this year. Advising across the capital stack allowed us to think creatively in sourcing best in class partners to help bring Forest Mill forward. The JV creation further evidences the attractiveness of the Living sector for investors and the positive momentum we are seeing building into 2024.”
Olympian Homes was advised by JLL Living Capital Markets and Freeths and HGP was advised by Shoosmiths.
HGP commits £15 million of equity for 300-home residential Joint Venture
Housing Growth Partnership (“HGP”), the Lloyds-backed equity investor in the UK Living sector, has committed £15 million of equity to a newly formed joint venture (“JV”) with Cayuga Homes (“Cayuga”), the Sussex based property developer. The JV will target the delivery of up to 300 homes for sale, along England’s South Coast, and is HGP’s latest investment under its Regional Growth Initiative (“RGI”) model.
The JV completed its first acquisition, the Montague Quarter Shopping Centre in Worthing, in October, with HGP investing £4.2 million. Cayuga has secured planning for the delivery of 42 energy efficient flats above the shopping centre’s commercial tenants, which include TK Maxx, Nandos, HMV as well as local shops and restaurants. Construction will begin on site in January, alongside contractor Trinity Homes, with the scheme due to complete in Q3 2025.
Alongside HGP, Paragon Development Finance (“Paragon”) has provided the JV with a £14.5 million senior acquisition and development facility to support the delivery of the scheme.
James Hutchinson, Investment Director at HGP, commented: “This JV alongside Cayuga is the latest demonstration of our continued commitment to providing SME developers with institutional equity support, to accelerate the delivery of much needed housing across the UK. This initial investment under our Regional Growth Initiative provides a blueprint for how town centre retail assets can be regenerated to meet local housing demand, in a sustainable manner, and is closely aligned with our social impact objectives.”
HGP’s RGI was established with the purpose of providing a longer-term equity commitment to SME developers & housebuilders to help realise their growth plans. The RGI provides ambitious management teams with access to a pot of institutional equity to fund multi-site growth plans, allowing them to free up their own equity to invest into their growing businesses. To date, £67 million of the c. £300 million of total equity invested by HGP has been under the RGI structure, supporting 11 SME developers and housebuilders to deliver 1,621 homes.
HGP, Paragon and Cayuga Homes previously partnered to deliver a seven-story, 33-apartment, Kingsway scheme in Hove, Brighton. HGP committed £3.2 million of equity, supporting Cayuga with site purchase and development equity as well as providing access to its unique panel of senior advisers, who can provide developers with guidance around development finance, ESG, Modern Methods of Construction, Project Management, Sales, Marketing and more. Paragon provided c. £18 million of senior debt for the delivery of the scheme, which is expected to complete in Q1 2024.
Ed Deedman, Director of Cayuga Homes commented: “Cayuga are extremely proud of our new JV with Housing Growth Partnership; we could not wish for better partners and the funding will secure the delivery of our company’s exciting pipeline of new sites across Sussex and beyond.”
Steve Mountain, Paragon Development Finance Senior Relationship Director, added: “This is an exciting scheme that will bring fresh energy into the centre of Worthing, creating a vibrant mixed-use space of residential homes, retail and leisure. We have a strong relationship with Cayuga Homes having worked with them on two previous schemes; we look forward to seeing this project take shape in the coming months.”
The Southeast continues to be a key region for HGP, where it has invested c. £95 million of equity since 2016, enabling the delivery of c. 1,550 homes.
HGP provides £1.85 million of equity to fund Stancliffe Homes’ 47-home development in the Midlands
Housing Growth Partnership (“HGP”) has provided Stancliffe Homes with £1.85 million of equity to bring forward the delivery of 47 homes in Tansley, on the edge of the Peak District.
Comprising a mix of two to five bed semi-detached and detached houses, along with two-three bed bungalows, the Tansley scheme will also include six affordable homes. Each home will benefit from solar provision and be EPC A rated.
The housing mix has been carefully designed to attract families commuting to the nearby employment hubs of Chesterfield, Derby, Sheffield and Nottingham, all of which are c. 30 minutes away by car and accessible via nearby public transport links. Tansley is a popular visitor destination less than 2.5 miles east of the Peak District National Park and 14 miles from Derby.
Stancliffe Homes is an established developer in the Midlands where is has delivered over 170 homes since 2018. The investment is HGP’s second alongside Stancliffe homes, following a £1 million investment to support the delivery of a 76 home scheme in Worksop in Nottinghamshire.
Mike Murphy, Midlands & Wales Investment Director of HGP commented: “The Stancliffe team has a successful track record building much needed, high quality homes across the Midlands. We’re excited to strengthen our partnership with Stancliffe, including offering expert advice through our board of Senior Advisors.”
Sam Jones, Director of Stancliffe Homes commented: “HGP’s unique offering and approach to investment in housebuilding has been key in bringing our latest scheme in Derbyshire to fruition. The team at HGP have proved to be a steadfast and highly supportive partner for is in the past and we’re very pleased to be working together again to deliver more high-quality, energy efficient homes in our area.”
Former Homes England Chief Investment Officer Gordon More joins Housing Growth Partnership as Senior Strategy Advisor
Gordon More, former Chief Investment Officer and interim CEO of Homes England, has been appointed as a Senior Strategy Advisor at Housing Growth Partnership (“HGP”), the equity investor which is backed by Lloyds Bank and Homes England. Gordon joins HGP’s unique, 20-strong panel of highly experienced industry experts. Gordon will be available to advise HGP and its partners on strategy and support HGP’s expansion across the Living sectors.
Gordon brings over 30 years’ of experience in the banking and real estate finance space, having held senior roles at Lloyds Bank, HBOS and Bank of Scotland.
Gordon joined Homes England in May 2014 on secondment as Chief Investment Officer, a role that became permanent in 2017, where he oversaw £45 billion of investment activity. In 2021 he was appointed interim CEO to oversee the recruitment of a permanent appointment, whilst also leading the delivery of the £8 billion Affordable Housing Programme 2021/2026. He sat on the Homes England Board in 2021, and was a member of the Investment Committee between 2017 and 2021.
Gordon currently holds a number of Board and Committee roles spanning the residential and housing sectors, including non-executive director at Hyde Housing, Sigma Capital and Kingswood Homes and Senior Advisor at JLL.
Vic Hepburn, CEO at HGP, commented: “Gordon’s previous roles and continued executive support to businesses in the sector means he is ideally placed to work with HGP as we look to increase our equity investment into the Living sectors whilst delivering great outcomes for local communities. He understands both the market need and the challenges that stand in the way.”
Gordon More, Senior Strategy Advisor at HGP, added: “Enabling SME housebuilders to expand and accelerate their pipeline underpins the HGP model and is vital if we are to create a more robust and resilient housing market. The current environment for delivering new homes remains highly challenging, whether it’s regulatory, planning, financing, labour or raw material pressures, which is where HGP’s unique Senior Advisor panel can make a real difference.”
Housing Growth Partnership invests c£18 million of equity to fund the delivery of 557 new homes in the Midlands
Housing Growth Partnership (“HGP”), the Lloyds-backed equity investor in the UK Living sector, has invested £17.7 million of equity across seven housing schemes in the Midlands since the start of 2023.
HGP’s investment, alongside a diverse mix of established, local housebuilders, will enable the accelerated delivery of 557 much-needed for-sale and for-rent apartments and houses across the undersupplied Midlands region. The schemes, which are scheduled to complete between Q3 2024 and Q4 2025, comprise:
- A sustainability-led retrofitting of the former St. Mary’s Hospital in Melton Mowbray, Leicestershire, to deliver 41 houses and four apartments, alongside Snowdown Homes
- 37 and 166 apartments respectively in Birmingham city centre, with Rainier Developments and 10M
- In Leicester city centre, 171 Build-to-Rent apartments, alongside Monk Estates
- 21 homes in Sutton, Bedfordshire, representing a second transaction with Cora Homes. The scheme will be partly delivered using Modern Methods of Construction, reducing carbon emissions and accelerating construction
- 47 new homes in Tansley Gardens, alongside Stancliffe Homes
- Land purchase for c70 new homes in Derbyshire, in partnership with Cora Homes
The Midlands is a key region for HGP, where it has been partnering with SME housebuilders since 2016. To date is has provided c. £37 million of equity funding across 20 schemes in both the East and West Midlands, of which over £26 million has been invested over the last two years. HGP’s equity funding is addressing an acute housing shortage in the Midlands, exacerbated by rising house prices and a shortage of good quality, sustainable homes.
Mike Murphy, Investment Director for the Midlands at HGP, said: “Against a restrictive debt financing backdrop, the requirement from regional UK developers for funding solutions that enable them to grow their businesses and accelerate housing delivery has never been more acute. We have significant ambitions in the Midlands to continue expanding into different tenures. At the same time, these investments are aligned with our commitment to funding schemes which are delivering demonstrable environmental and social value.”
