Aviva Investors has made a £37.5m (€40.2m) investment into the UK social housing sector by way of a private placement with Wales & West Housing.

The £355bn global asset manager, investing on behalf of the Aviva UK Life annuity business, said the 30-year facility is expected to help the Welsh social landlord meet its plan of supplying an additional 2,500 new homes over the next five years.

Wales & West manages more than 12,000 affordable homes in 15 local authority areas across the country, including over 3,000 properties for older people.

The funding will also enable Wales & West to focus on working in partnership with the Welsh government to advance a programme of decarbonisation across its portfolio of homes, whilst continuing Aviva Investors’ strategy of seeking opportunities that can offer investors stable cashflow generation coupled with enhanced returns in the current low interest, low yield environment, the manager said.

Aviva Investors said the latest investment is its third major primary investment into the UK’s social housing sector this year. The asset manager completed a £60m debt facility with Coastal Housing Group and £75m private corporate debt facility with Settle Group in July and August respectively.

Munawer Shafi, head of structured and private debt at Aviva Investors, said: “Beyond the relative value we see in the sector over the long-term, social housing has an important role to play in society through the provision and development new affordable homes and we are pleased to support its experienced management team through our investment activity.

“Wales & West is also particularly focused on improving the energy efficiency of its homes, something we see as important as we look to decarbonise our investment portfolios. As such, it fits well with our desire to seek out investment opportunities that can generate good investment outcomes for our clients, whilst having a wider positive impact at a community and environmental level.”

Ashish Dafria, CIO, Aviva UK Life, said: “As a business with a focus on the long-term, we often look at how the activities we engage in can contribute towards creating a better tomorrow for our clients and customers.

“As part of that, we believe it is important that our investments not only provide consistent cashflows to meet our liabilities but also have a positive impact beyond our business and into wider society.”

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