April 13, 2023
Fiera Real Estate (“Fiera”), on behalf of the Fiera Real Estate Long Income Fund UK (“FRELIF”), is delighted to announce its new, strategic partnership (“The Partnership”) with Phi Capital Investments Ltd “SimplyPhi”, affordable housing sector specialists and real estate and technology provider to Public Sector Organisations and Real Estate Investors.
The Partnership will see FRELIF commit an initial tranche of £30m equity to acquire a geographically diversified portfolio of homes, which will be let on 20 year+ index-linked leases direct to UK Government local authorities who can then utilise this stock to house those who are most in need and ease the increasing burden on temporary accommodation.
In committing to the strategy, Fiera recognises the acute under supply of affordable housing in the UK where a combination of sales, conversion to the Government’s “affordable rents” regime, reduction in social rent and restricted funding for new homes means that current and future supply is likely to remain severely limited. There are currently 1.2 million UK households waiting for affordable housing and 100,000 in temporary accommodation including 120,000 children. This is costing the nation approximately £1.4bn per annum making the biggest social problem of our age a very expensive one also. Fiera firmly believes that it is incumbent on the UK Real Estate Industry to identify opportunities to address this shortage and to do this now.
This partnership represents FRELIF’s first foray into the affordable housing sector, having identified a partner that is uniquely placed to source and transact on suitable stock via SimplyPhi’s established and strong relationships with a large number of local authorities throughout the UK. For FRELIF the long, strong and progressive income generated by CPI indexed local authority leases also fits perfectly with the Fund’s overall goals and objectives, whilst further cementing the Fund’s market leading ESG credentials.
Local authorities that commit to the programmatic venture with FRELIF/SimplyPhi will benefit from upgraded and refurbished housing stock that can be used to flexibly manage the needs of their borough housing teams, be that temporary/emergency accommodation or more long-term housing solutions, without requiring a large, initial capital commitment to acquire suitable housing.
Anne-Marie Keane, Co-Fund Manager of FRELIF commented “We have been looking closely at the affordable housing sector for some time and this new partnership with SimplyPhi is unique in that it will deliver diversified government backed income let on 20+ year leases whilst benefitting from annual CPI indexation. Importantly, whilst achieving all of the Fund’s key investment themes, we are also helping to address one of the biggest crises of our time being the woeful and ongoing undersupply of affordable accommodation for the most vulnerable in our society. We are happy to be leading the way in this most important of investment areas.”
Athesan Guna, Chief Investment Officer at SimplyPhi said “Our partnership with Fiera enables us to continue to help our public sector customers acquire much needed affordable housing to meet the ever-growing challenges presented by the rising cost of temporary accommodation. Retrofitting homes to net-zero and upgrading housing standards are core to our objectives, ensuring families living in these homes are able to do so in comfort and safety.”
SimplyPhi were advised exclusively by Lakefield Capital in setting up the strategic partnership.