Institutional investors contribute £40m to Essential Worker Housing Fund by Thriving Investments for accommodation development
A new investment strategy is taking shape in the UK, with a focus on providing affordable housing for essential workers in Greater Manchester and Scotland. This approach is leveraging long-term patient capital, government support, and partnerships with experienced housing providers to deliver high-quality, energy-efficient homes.
UK-based Thriving Investments has raised £40m for a place-based impact strategy aimed at delivering affordable housing to essential local workers in Greater Manchester. The Greater Manchester Combined Authority (GMCA) has provided a £10m loan to Thriving Investments for the fund. The Greater Manchester Pension Fund (GMPF), Better Society Capital (BSC), and Places for People Group have secured an initial £30m of equity commitments for Thriving Investments' New Avenue Living Greater Manchester Housing Fund.
Thriving Investments plans to leverage its rental housing platform and relationships with national and regional housebuilders to create a £200m, 1,000-home fund portfolio over the next three years for its second fund. The fund's strategy will be rolled out under the 'New Avenue Living' platform brand across multiple cities in the UK. Thriving Investments' strategy will involve working with local SMEs to deliver sustainable homes in key UK cities, ranging from 50-150 units each.
In Greater Manchester, market rents have jumped 27.5% over the past two years, making affordable housing a pressing issue. To address this, the new homes built by the fund will be let at a discount compared to rents paid on the open market. Marie-Alix Prat, investment manager at Better Society Capital, mentioned that the investment seeks to provide affordable homes for essential workers in Greater Manchester.
In Scotland, Thriving Investments' second essential worker rental housing strategy will regenerate over 37 acres of brownfield land, delivering around 1,200 homes for essential workers. The fund's place-based impact thesis aims to boost local economies. However, no new information about this strategy was provided.
Social impact and ESG metrics are crucial in measuring the local community impact of these investments. Thriving Investments has adopted these metrics, focusing on apprenticeships, training, brownfield land regeneration, and community contributions.
Another example of this strategy can be seen in Octopus Capital's approach. They manage over £360 million in affordable housing investments, owning 500 homes nationwide. Significant backing for their efforts comes from the Strathclyde Pension Fund in Scotland and other LGPS funds. Their approach uses patient, responsible capital through a for-profit registered provider (NewArch Homes), partnering with local authorities and housing associations to scale impact while ensuring resilient, index-linked income for investors.
The median average home in England stood at £290,000 in 2024, which was 7.7 times the average earnings of a full-time employee, according to the UK Office for National Statistics. This highlights the need for strategies like the one Thriving Investments is pursuing.
By focusing on essential workers, delivering energy-efficient homes, and aligning with government support programs, these investment strategies aim to increase the availability of quality affordable homes, particularly in Greater Manchester and Scotland.
- Thriving Investments' focus on essential worker housing in Greater Manchester, through their £200m, 1,000-home fund portfolio, demonstrates a commitment to social impact, addressing the pressing issue of rising market rents in the area by offering discounted rents.
- The development finance raised by Thriving Investments, in partnership with the Greater Manchester Combined Authority, Better Society Capital, GMPF, and Places for People Group, will not only provide affordable housing but also boost the local economy, as outlined in their place-based impact thesis.
- In line with the growing emphasis on energy transition, Thriving Investments' strategy of building energy-efficient homes fits well with the lifestyle preferences of modern society, while also attracting finance from institutions like Octopus Capital, known for their investments in affordable, energy-efficient housing.
