The UK’s Universities Superannuation Scheme (USS) has acquired a £405m (€474m) portfolio of over 3,000 shared-ownership homes across the UK from a Blackstone and Regis Group partnership.
The £80bn pension scheme for universities and higher education institutions has acquired the assets from Sage Homes as seed assets for Sparrow Shared Ownership, a newly launched social-housing provider.
The deal is the largest shared-ownership portfolio acquisition since 1990, marking a major investment by a UK institutional investor.
David Avery, chair of Sparrow Shared Ownership, said: “The launch of Sparrow Shared Ownership is an exciting moment for the UK’s shared-ownership sector. Thanks to this significant investment of patient, long-term capital from the UK’s largest private pension fund, Sparrow Shared Ownership starts life with more than 3,000 high-quality shared-ownership homes that are helping thousands of people across the country onto the housing ladder.
“Our number one focus from day one is on our residents, and we will be working with Sage Homes to ensure a smooth transition of management services.”
James Seppala, head of real estate Europe at Blackstone, said that, through Sage Homes which was established in 2017, Blackstone has been the largest provider of newly-built affordable housing in the country for the last three years.
Seppala added: “By deploying capital to fund the development of new homes, we are proud to have created an institutional grade portfolio which has, in turn, attracted more long-term institutional capital into the sector.
“This transaction will allow us to continue to invest capital into Sage Homes to help alleviate the structural undersupply of housing across the UK.”
Alison Thain, chair of Sage Homes, said: “This sale of a portfolio of shared-ownership properties is an endorsement of Sage Homes’ strategy. Several years ago, we started on a journey to attract increasing amounts of institutional investment and capital into the sector.
“For the last three years, Sage has been the largest provider of new affordable homes in England and this investment proves our model, enabling continued growth and delivery of the homes that the country needs.”
Eamon Ray, head of private credit and alternative income at USS Investment Management, the pension fund’s in-house investment manager, said Sparrow Shared Ownership will provide further capital for the UK shared-ownership sector.
“This investment allows USS to use its long-term capital to support the multi-decade nature of Sparrow’s business plan whilst supporting the UK social-housing sector,” Ray added.
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