In a significant move within the UK housing market, Blackstone, the American investment giant, has sold over 3,000 shared ownership homes to the Universities Superannuation Scheme (USS) for £405 million. This transaction marks the largest affordable housing deal since the inception of the shared ownership scheme in 1990.
The USS, which manages the retirement funds of half a million lecturers and researchers, has acquired these properties from Sage, a company predominantly owned by Blackstone and the Regis Group. Sage, established in 2017, has rapidly expanded its portfolio to nearly 17,000 homes across the UK, with approximately 11,000 rented at affordable or social rates. The remaining properties fall under the shared ownership scheme, which allows buyers to purchase a share of a home and pay rent on the portion they do not own, with the option to increase their ownership over time.
This sale is Blackstone’s first divestment of its UK residential portfolio and the second-largest residential deal of the year, following its own £580 million acquisition of new homes from Vistry, a FTSE 100 developer. James Seppala, Blackstone’s head of European real estate, emphasized that the proceeds from this sale would be reinvested into acquiring more affordable homes, reinforcing Blackstone’s commitment to addressing the UK’s housing shortage.
The 3,000 homes sold will serve as the foundational assets for Sparrow Shared Ownership, a new social housing company launched by the USS. David Avery, a veteran in the housing association sector, will chair Sparrow. This initiative aligns with the USS’s strategy to bolster its investments in social housing, having first entered the sector in 2020 through Residential Secure Income.
Eamon Ray, head of private credit and alternative income at USS Investment Management, highlighted that Sparrow would inject further capital into the UK shared ownership sector, a move likely to be welcomed by policymakers. The Labour government has set an ambitious target to build 1.5 million new homes over the next five years, a goal that will require substantial private investment.
Institutional interest in the UK rental market is growing, with less than 2% of rental homes currently owned by large institutions. Pension funds, insurers, and professional property investors are increasingly attracted to the sector due to its stable valuations and rental growth, which have been challenging to find in other commercial property markets.
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