Nuveen Real Estate plans to enter the UK affordable housing market on behalf of its parent TIAA.

The real estate investment manager has entered a joint venture with Preferred Homes Limited to develop residential assets for the TIAA general account.

Preferred Homes, a for-profit provider of affordable housing registered in 2020 by real estate investment firm Ashbourne Capital Partners, will manage the properties.

Nuveen said the joint venture had identified development opportunities on three sites in the UK where there is a significant undersupply.

The developments will be designed to integrate with their local areas, providing opportunities for local businesses and enhancing amenities available to local residents.

Nuveen and Preferred Homes also intend to contribute to the regeneration of town centres and residential areas in the UK, and help alleviate loneliness among local elderly populations.

Nuveen said the investments will also help reduce the cost burden on local authorities of providing care services, alleviating fiscal pressures at local levels and releasing funding for other initiatives.

The sites will target BREEAM Very Good building certifications as a minimum, while cycle stores will also be integrated into all designs and electric charging points will be provided in car parks.

Bill Bateman, managing director for European housing strategies at Nuveen, said: “We have identified an opportunity to be an early mover in this emerging sector which offers huge scalability potential in the UK.

“With an increasingly ageing population and acute affordable housing shortage, Nuveen are looking to provide long-term, impact-driven investment strategies which deliver risk-adjusted returns as well as creating social value.

“We are really excited to be partnering with Preferred Homes to assemble a UK-wide portfolio of well-connected, sustainable community-based housing to reassure people that their future care needs are accounted for.”

Findlay MacAlpine, director of Ashbourne Capital Partners and CEO of Preferred Homes, said: “Our interest in affordable housing is driven by a desire to extend the range of housing options available to older and vulnerable people and encourage more cost-effective models of care to be delivered within sustainable, future-proofed homes.”