Investment of an additional £118 million by UK pension funds in Octopus's affordable housing fund
In a significant move towards addressing the UK's housing crisis, Octopus Capital's Affordable Housing Fund has secured an additional £118 million in investment from three UK Local Government Pension Schemes (LGPS): Strathclyde, London CIV, and Avon. This brings the total funds under management to over £360 million.
The Affordable Housing Fund, with its aim to reach £1 billion by 2026, supports the delivery of good-quality, affordable homes across the UK. The fund emphasises sustainability and social impact, aligning with the government's ambition to deliver around 300,000 social and affordable homes over the next decade.
A key milestone has been reached with NewArch Homes, Octopus Capital's for-profit registered provider, now owning 500 affordable homes. NewArch Homes, in partnership with CHP, recently bought 220 homes in April, a mix of affordable rent and shared ownership.
This investment comes at a critical time when over 1.3 million people are waiting on social housing registers in the UK, and over 165,000 children are living in temporary accommodation. The UK government's roadmap for achieving these targets was outlined in a policy paper on "delivering a decade of renewal for social and affordable housing". The government has committed £39 billion to the sector over the next decade through its new Social and Affordable Homes Programme.
The investment from London CIV, headed by Christopher Osborne, brings their total commitment to £108 million. In September last year, Octopus found that almost two-thirds of LGPS in the UK regarded affordable housing as the most important area for social impact.
Meanwhile, in a separate development, CorPower Ocean has landed a €40 million EU grant for a wave energy farm. This move signifies another step towards the UK's commitment to renewable energy, with Renewable energy firm Renalfa having recently raised €315M from an EBRD-led investor group.
As the Affordable Housing Fund continues to scale its impact-driven investment strategy, it is clear that these investments are a significant step towards addressing the UK's housing and renewable energy needs.
The Affordable Housing Fund, aiming to reach £1 billion by 2026, not only supports the delivery of affordable homes but also prioritizes sustainability and social impact, contributing to the UK government's ambition to deliver around 300,000 social and affordable homes over the next decade. This development finance, with a recent addition of £118 million from three UK Local Government Pension Schemes, boosts the energy transition efforts by enabling investments in renewable energy projects, such as CorPower Ocean's wave energy farm.
