(London) – Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), has completed a £37.5 million private placement with Wales & West Housing (‘Wales & West’), one of the leading social landlord in Wales, on behalf of the Aviva UK Life annuity business.
It is the third significant primary investment that Aviva Investors has made into the UK’s social housing sector this year, having completed a £60 million deal with Coastal Housing Group and £75 million placement with settle housing in July and August respectively.
The 30-year facility is expected to help Wales & West meet its ambition of supplying an additional 2,500 new homes over the next five years, the vast majority of which will be social rented homes for those in greatest housing need. The funding will also enable Wales & West to focus on working in partnership with the Welsh Government to advance a programme of decarbonisation across its portfolio of homes, whilst continuing Aviva Investors’ strategy of seeking opportunities that can offer investors stable cashflow generation coupled with enhanced returns in the current low interest, low yield environment.
In November Aviva Investors published its annual Real Assets Study, in which cashflow-matching was revealed to be the key factor for insurers and pension funds looking to build resilience into their investment strategies. In addition, 51 per cent of insurers and 42 per cent of pension funds surveyed as part of the Study highlighted investments in social housing as being key assets to include in their portfolios.
Wales & West manages more than 12,000 affordable homes in 15 local authority areas across the country, including over 3,000 properties for older people.
Munawer Shafi, Head of Structured and Private Debt at Aviva Investors, said:
“Beyond the relative value we see in the sector over the long-term, social housing has an important role to play in society through the provision and development new affordable homes and we are pleased to support its experienced management team through our investment activity. Wales & West is also particularly focused on improving the energy efficiency of its homes, something we see as important as we look to decarbonise our investment portfolios. As such, it fits well with our desire to seek out investment opportunities that can generate good investment outcomes for our clients, whilst having a wider positive impact at a community and environmental level.”
Ashish Dafria, Chief Investment Officer, Aviva UK Life, added:
“As a business with a focus on the long-term, we often look at how the activities we engage in can contribute towards creating a better tomorrow for our clients and customers. As part of that, we believe it is important that our investments not only provide consistent cashflows to meet our liabilities, but also have a positive impact beyond our business and into wider society. Wales & West is a significant provider of social housing and we are very pleased to support its long-term ambitions, at a time when the need for greater affordable housing provision is becoming increasingly apparent.”
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