Affordable Housing
PI’s Affordable Housing platform benefits from affordable housing supply deficits and capex shortfalls. We act as the investment advisor and operator, leveraging our network and experience of housing associations and their legislative requirements. Enabling investors to gain attractive returns and housing associations to gain investment from reputable investors at scale.
Pi Afford Housing platform investment returns:
- Investments are targeted with the aim of generating a minimum 16% gross IRR/1.5x gross equity multiple on invested capital
- Generating secure long term (20 – 30yr)
- Fully insuring and repairing lease
- CPI linked income
- 100% ESG compliant investment
Overview:
There is a chronic shortage of affordable housing throughout the UK, with over 8 million people living in unaffordable, insecure or unsuitable homes. The position is even more acute regarding the lack of high quality, energy efficient affordable housing for rent.
The opportunity:
Our investment strategy focuses on two types of property: New, ready built property and ‘Retro-fit property’ which is housing association property which must be retrofitted/re-developed to meet 2030 net zero carbon and safety legislation. Investment in both types of property enables investors to gain exposure to quality assets, leased to qualified housing associations in a highly regulated and trusted market.
The supply imbalances in UK residential property have driven strong capital growth over the long term in conjunction with strong rental income profiles.
New, ready built property:
New, ready built property is acquired with vacant possession, enabling housing associations to lease high quality property, which is energy efficient without the requirement to incur heavy acquisition capital costs. Investors benefit from a secure long term income (20-30yr) which is index linked, an initial capital uplift at acquisition from purchasing power with further capital growth potential.
Retro-fit property:
‘Retro-fit property’ is housing association property which must be retrofitted/re-developed to meet 2030 net zero carbon and safety legislation. There is in excess and £106bn of retrofitting works to be completed across 500,000 properties within the affordable housing sector. The scale of the issue is such that housing associations must seek external capital to fulfil their legislative requirements.
The property is bought from associations, the retrofit works carried out by the investor, with the property leased back to the housing association upon the completion of the works. This enables housing associations to meet their legislative requirements, whilst not placing additional strain on their capital commitments.
| New, ready built property: | Retrofit property: |
|---|---|
| Market exposure to high quality, sustainable, energy efficient assets | Access to a vast pool of circa 500,000 Housing Association property in need of retrofitting |
| Immediate equity uplift from bulk purchase power upon acquisition | Current Government estimates place retrofit works in excess of £106bn providing long term platform for investment partners |
| Secure long term CPI linked income | Immediate equity uplift from bulk purchase power upon acquisition, with further uplift in value post retrofitting |
| Build Cost uncertainty negated | Secure long term CPI linked income |
| Planning Permission risk negated | 100% ESG compliant when used for Affordable Housing/Keyworker Rental |
| 100% ESG compliant when used for Affordable Housing/Keyworker Rental | Significant impact on Carbon Reduction targets, energy costs, and fuel poverty due to retrofitting works |