The Universities Superannuation Scheme (USS), the UK’s largest pension fund, has made a notable investment, purchasing 3,000 shared ownership homes from Blackstone’s Sage.
This acquisition, valued at £405 million, marks a significant step in the housing market, underlining USS’s commitment to expanding its investment portfolio in affordable housing.
USS’s acquisition of shared ownership homes illustrates a strategic expansion within the housing market. The purchase, involving properties from Sage, highlights USS’s effort to diversify its holdings while supporting affordable housing initiatives.
The significant £405 million investment signals the fund’s intention to support homebuyers who may struggle to purchase properties outright.
Shared ownership schemes play a crucial role in the housing sector by allowing individuals to purchase a portion of their home. Over time, homeowners can acquire additional shares, eventually owning the property outright.
These schemes are essential for individuals who may find full homeownership financially prohibitive, offering a structured path to owning a home.
Blackstone’s sale to USS represents its first major sale from its UK residential portfolio, consisting of about 20,000 homes. This sale aligns with Blackstone’s strategy to reinvest in housing.
James Seppala, Blackstone’s head of real estate Europe, noted that this transaction helps sustain investment in Sage Homes, ultimately addressing the UK’s housing shortage by building more homes.
As the largest provider of newly built affordable housing in England, Sage Homes has invested substantially in developing shared ownership properties. The sale is perceived as a testament to its strategy and success.
Alison Thain, Chair of Sage Homes, commented on the ongoing journey to attract institutional capital, reinforcing their leadership in affordable housing development.
The complexity of the acquisition involved key financial advisors. Barclays led the transaction for Blackstone and its affiliates, whereas USS relied on guidance from Evercore and Five Sigma Finance.
This collaboration reflects meticulous planning and advisory involvement to ensure the transaction complemented the strategic goals of both buyer and seller.
The USS’s investment is expected to influence the housing market significantly, encouraging further institutional investments in affordable housing.
Blackstone’s reinvestment plans promise positive implications for the development of additional affordable housing units across the UK.
USS operates from its main office in the Royal Liver Building in Liverpool, emphasizing its longstanding presence and operational influence within the UK financial sector.
USS’s strategic acquisition of shared ownership homes from Blackstone underscores a vital step towards supporting the affordable housing market. The move not only reinforces its investment portfolio but also contributes to addressing the housing challenges faced by next-generation homebuyers.
