Global law firm Eversheds has advised Legal & General (L&G) on investing £252m with Places for People (PfP) to help build 7,000 new homes.
Legal & General has secured a portfolio of over 4,000 housing units, let to Places for People Homes on a new 50 year lease, as it continues to grow its role in supporting the UK’s housing needs. Places for People Homes will use the new finance from L&G’s investment to expand the housing stock in the UK by building 7,000 new housing units over the next seven years. The new housing stock will include affordable, private rented sector and owner-occupier accommodation.
The Places for People investment represents the largest direct investment made to date by an institutional investor into the affordable housing sector; L&G has acquired the portfolio for a total consideration of £252 million. The investment by L&G Retirement and managed by Legal & General Capital is part of L&G’s strategy to increase funds allocated to direct investments and infrastructure. These investments provide an excellent match for our long-term annuity and pension liabilities, and supports UK economic growth.
Due to its ground-breaking nature, the investment was extremely legally complex. It set the Eversheds team a variety of novel problems to solve including: collective enfranchisement and lease extension risk, the special powers and features of PfP as an industrial and provident society and the navigation of the HCA’s regulatory housing grant regime and its application to PfP as a registered social housing provider.
The Eversheds’ team was: Bruce Dear (Partner), Richard Lampert (Partner), Steve Felstead (Partner), Helen Robinson (Principal Associate), Michael Callaghan (Principal Associate), Lizzie Chapple (Associate) and Lisa Scharfenorth ( Senior Associate).
Bruce Dear, Eversheds’ Head of London Real Estate commented:
“We are really pleased to have helped Legal & General deliver this ground-breaking investment into the social housing sector. We share their commitment to working hard to resolve the fundamental needs of the UK economy. We look forward to working with them as they continue their deployment of capital into areas that deliver dividends both for the UK’s long term social and economic needs, and for their investors and customers.”
Pete Gladwell, Head of Public Sector Partnerships at Legal & General Property, commented:
“This sizeable investment represents our determination to use institutional capital to achieve a step change in the provision of affordable and social housing in the UK. The innovative structure enables councils and registered providers to unlock capital from their existing portfolios and fund the construction of new homes, whilst providing a long term, sustainable rental stream from which L&G can meet its pension obligations. As our legal advisers, Eversheds put in a monumental effort working with the team on this ground-breaking investment.”
