Private equity powerhouse Blackstone and property investor Regis Group have announced a major acquisition of 1,750 affordable homes from leading housebuilder Vistry. The deal, valued at £580 million, marks a significant step in addressing the UK’s affordable housing shortage.
The properties, located across 36 developments primarily in the south east of England, will be managed by Regis’ Blackstone-backed Leaf Living arm. The first sales are expected to commence by the end of the month.
Blackstone’s Commitment to Affordable Housing
Blackstone, a trillion-dollar asset manager, has significantly expanded its presence in the UK’s affordable housing market in recent years. The company cites a “chronic shortage of affordable homes” as a driving force behind its investments.
James Seppala, Head of European Real Estate at Blackstone, emphasized the role of private capital in alleviating housing shortages:
“Institutional private capital can play an important role in providing high quality housing stock across the UK, particularly in the private rented sector which is significantly undersupplied today. Partnerships such as these can meaningfully accelerate the delivery of new homes and help alleviate structural undersupply across the sector.”
Vistry’s Strategic Shift
Vistry, which shifted its focus to affordable housing partnerships last year after acquiring Countryside Partnerships, views this deal as pivotal. CEO Greg Fitzgerald highlighted the benefits of such partnerships:
“By working in partnership with organisations like Leaf Living, we can maximize the number of high-quality homes we deliver every year. This agreement supports our differentiated business model, with the certainty provided by the pre-selling of homes enabling us to accelerate our build programmes, guarantee work for our supply chain, reduce sales and build costs, and create vibrant new communities. This year, we are on track to deliver more than a 10% increase in new home completions, playing a key part in helping to address the UK’s acute housing shortage.”
Market Impact
Despite the positive news, Vistry’s shares saw a slight decline today, dropping 16p to 1293p. However, the company’s stock remains robust, having risen more than 40% over the year.
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Conclusion
The collaboration between Blackstone and Regis Group, alongside Vistry’s strategic focus on affordable housing, represents a significant development in the UK’s efforts to tackle its housing crisis. With a combined effort from private capital and innovative partnerships, the future looks promising for increasing the availability of high-quality, affordable homes.
