£50m loan for 814 Lancs homes
A HOUSING association has secured a £50m loan to fund a pipeline of 814 new homes in Lancashire over the next three years.
The money from Legal & General will be paid by over 40 years by Chorley Community Housing (CCH), a subsidiary of Adactus Housing Group.
Homes will be built with annuity money and the return on the loan will be used to pay pensioners’ annuities.
L&G says the investment match produces a better return for its pensioners than investing in gilts and provides real economic growth for the UK be creating much-needed new housing.
Managing director of L&G Retirement, Kerrigan Procter, said: “The UK has a chronic shortage of housing across all tenures. At L&G we are playing our part in changing this.
“Annuity money is ideally suited for investment in housing and infrastructure, as it can be invested for 20, 30 or 40 years, delivering economic growth and increased pensions for retirees.”
The financing is secured against a portfolio of existing assets as well as CCH’s housing development pipeline.
The loan includes flexibility tailored to the CCH’s development activities, with a deferred drawdown profile through to December 2016 and asset cover tests against a combination of properties completed and in development.
Group director of finance at Adactus, Paul Chisnell, said: “Having bedded down the stock transfer, completed the initial stock improvement programme ahead of schedule and promises to tenants, CCH is now looking to play a much greater role in meeting the demand for quality affordable accommodation in the area.
“Given the scale of CCH’s growth ambitions, in relation to its current asset base, we needed a level of flexibility in the early years of this development phase not typically demonstrated by institutional lenders to the sector.”
CLL has now invested a total of over £1.2bn across 14 deals. Transactions include seven loans to the social housing sector, two loans to the student accommodation sector, two hotel debt deals and a loan to the care home market.
The company was formed in 2007 to receive a large scale voluntary transfer of Chorley Borough Council’s housing stock.
The Association employs 80 staff directly and manages over 5,420 homes in the Chorley area. Adactus Housing Group is a regional housing group that is active across 21 local authority areas in the North West of England, with roots dating back to 1964.
The Group as a whole is one of the largest associations in Lancashire, managing more than 13,000 units and employing around 600 staff.
CCH was advised by Edmond de Rothschild Corporate Finance, London. The legal firm acting for CCH was Trowers and Hamlins, whilst Pinsent Masons advised Legal & General.
