Fiera Real Estate’s open-ended UK long-income fund is investing an initial £30m (€34m) to acquire a housing portfolio through a newly created local authority affordable homes partnership.

Fiera Real Estate Long Income Fund UK (FRELIF) is investing the first tranche of capital – in partnership with Phi Capital Investments (SimplyPhi) – to buy homes, which will be let on 20-year-plus leases to UK government local authorities for use as temporary accommodation.

FRELIF, which launched in 2009 and became open-ended in 2016, holds significant underweight positions in town centre retail and office markets.

Fiera Real Estate said the partnership represents FRELIF’s first affordable housing sector investment.

Anne-Marie Keane, co-fund manager of FRELIF, said: “We have been looking closely at the affordable housing sector for some time and this new partnership with SimplyPhi is unique in that it will deliver diversified government-backed income let on 20-plus year leases whilst benefiting from annual CPI indexation.

“Importantly, whilst achieving all of the fund’s key investment themes, we are also helping to address one of the biggest crises of our time, being the woeful and ongoing undersupply of affordable accommodation for the most vulnerable in our society. We are happy to be leading the way in this most important of investment areas.”

Athesan Guna, CIO at SimplyPhi, said “Our partnership with Fiera enables us to continue to help our public sector customers acquire much-needed affordable housing to meet the ever-growing challenges presented by the rising cost of temporary accommodation.

“Retrofitting homes to net-zero and upgrading housing standards are core to our objectives, ensuring families living in these homes are able to do so in comfort and safety.”

To read the latest edition of the latest IPE Real Assets magazine click here.