Macquarie Infrastructure Debt Investment Solutions (MIDIS) and MUFG Bank (MUFG) have provided a long-term debt facility of £150m in the form of a three-year revolving credit facility (RCF) of £30m, a 40-year senior secured private placement of £50m that refinances the RCF, and a shelf facility of £100m for Shepherds Bush Housing Group (SBHG).
Shepherds Bush Housing Group owns or manages over 5,000 homes that are largely social and affordable, primarily located in the popular area of the London Borough of Hammersmith and Fulham. The funding will allow SBHG to boost its affordable and shared ownership housing provision. The chronic shortage of affordable homes in West London, coupled with high property prices continues to drive the need for social housing. MIDIS and MUFG are proud to be supporting SBHG’s ambition to improve the situation in West London, with the housing association targeting the development of around 200 homes per year over the next four years.
Gareth Edwards, an Associate Director in MIDIS, said: “We are delighted to be able to support the provision of greatly needed affordable housing through SBHA, and we look forward to working in partnership with them over the term of the facility. Increasingly local housing associations are looking for alternative strategies to help meet longer-term funding requirements to support further investment, which is where institutional investors come in. The social housing sector is highly attractive to many investors because it offers long-term, secure, regulated and stable cashflows, and delivers a strong social impact.”
This is MIDIS’ third investment in the UK social housing sector, taking total commitments to over £200m. This is expected to continue as housing associations raise finance to address the housing crisis in the UK, and institutional investors are increasingly attracted to the sector.
Sanjay Narbheram, Director of Housing Finance at MUFG, commented: “We are delighted to have supported SBHG, particularly as it represents their first combined bank and institutional debt transaction. The strength of SBHG’s credit allowed us to run a competitive process to source institutional funding, which resulted in us successfully working with MIDIS.
“We see growing interest within the sector from a debt capital markets perspective, and this deal is a wonderful example of MUFG’s desire to work more closely alongside institutional investors. The sector continues to grow in importance for MUFG as we start to widen our client base, from both a geographical and unit number perspective.”
Mohit Jain, Director of Finance and Development at Shepherds Bush Housing Group, said: “We are aiming to significantly expand our development pipeline over the next few years and are very pleased with the financing achieved with MIDIS, who has taken a long-term outlook on our business, and shown flexibility and willingness to listen to our funding needs. We look forward to building a long-term partnership. This combined with the shorter-term RCF with MUFG provides a good match for our funding needs.”
Pictured above is a CGI of some of the homes that will be delivered by the Shepherd’s Bush Housing Group in 2020.