Global investment giant Patrizia has announced the final close of its debut impact investing strategy with firepower to create a €500 mln+ pan-European social and affordable housing portfolio.
Patrizia Sustainable Communities has secured equity commitments from 10 institutional investors, with Danish pension funds AP Pension and PKA as cornerstone investors. It aims to build a balanced portfolio targeting over two thirds of its assets under management in affordable and social housing, alongside wider investments in alternative living, social infrastructure and community space.
The strategy focuses on core European residential markets like the UK, Ireland, Benelux, France, Germany, Spain and the Nordics.
Launched in January 2022, Patrizia Sustainable Communities has already committed a significant share of its capital to affordable housing projects in major metropolitan areas in western Europe.
It commenced its investment programme with four major developments, two in Dublin in Ireland, and two in the UK in Milton Keynes and Bishop’s Stortford, which all together will deliver around 1,000 affordable and social homes.
In Ireland, the strategy has invested in two affordable and social housing developments in established residential neighbourhoods in the outskirts of Dublin. The projects have the potential to house over 1,600 low-to-middle income residents in modern apartments that are EPC A-rated and HPI (Home Performance Index) certified, and equipped with solar panels.
The investments will also deliver a new library, community centres, crèches as well as green public spaces. Both schemes have agreements in place with an approved Housing Association to ensure the long-term impact benefits.
In the UK, Sustainable Communities has launched a programme targeting €115 mln to be invested in the development of environmentally and socially sustainable new-build single-family housing for the UK’s affordable housing sector.
The first two investments have been made to forward-fund the development of 70 new-build homes on long-term affordable rents in Milton Keynes, which is less than 50 miles north of London, and 80 new-build homes in Bishop’s Stortford, which is less than 25 miles northeast of London. In both projects, Patrizia also secured additional social homes to be built for the local registered housing provider.
Marleen Bikker-Bekkers, Patrizia Sustainable Communities fund manager and Patrizia Global Partners head of European investments, said: 'With over €500 mln of firepower, we are incredibly excited to make a meaningful difference in tackling housing affordability through our pan-European investment programme.
'Across the world we are experiencing a transition in the way we live that is driven by changes in demographics, societal needs and economic shifts, placing huge pressure on the cost of living.
'With over 80 million Europeans now overburdened by housing costs, accelerating the provision of high-quality homes at affordable levels has never been more urgent and cannot be achieved by governments alone. We are happy to work with them and contribute to the solution of this major issue that people face day-to-day.'
Mathieu Elshout, head of sustainability and impact investing at Patrizia, said: 'A core pillar of Patrizia’s sustainability strategy is to become a leading impact investor in global real assets by 2035.
'Despite the economic headwinds, the strong demand we have seen from investors for our first-ever impact strategy underlines our clear conviction for making an impact through social and affordable housing, and represents a significant step towards achieving our impact and sustainability goals.
'As we build-out our affordable housing experience in key residential markets, we look forward to delivering not only much-needed new homes but also providing our investors with attractive dual returns of sustained social and environmental impact alongside good financial returns.'
As Patrizia’s first SFDR Article 9 strategy, the programme aims to house more than 7,500 residents in affordable housing in around 25 European metropolitan areas. The strategy has three impact themes – affordable housing, green real estate, and inclusion and connectivity – and is aligned to eight of the 17 UN Sustainable Development Goals.
