Aviva Commercial Finance has provided its first social housing loan – a 25-year, £67m facility loan for Sapphire Extra Care.
The debt will be used to construct and maintain 390 social housing units targeted at the over 55s in Stoke on Trent in the UK. The Sapphire consortium, comprising the Eric Wright Group, Kajima Partnerships and Your Housing Group, will develop the units across three sites.
Toni Miller, head of new business at Aviva Commercial Finance, said the deal represents “a good long term investment for Aviva and for our annuity customers”. The life insurance company originates long-term, fixed rate senior loans to match Aviva’s annuity book through ACF and also lends shorter term through its Aviva Investors debt business. This month Barry Fowler joined the commercial finance business from Lloyds as its new managing director.
UK insurers have moved into social housing funding, spotting an opportunity as banks have pulled back from long-tenor financing. Long term housing and infrastructure projects suit their liabilities while providing strong risk-adjusted returns
.Legal & General has recently stepped up its lending to social housing since entering the sector last March. Its 40-year, £25m loan to Adactus Housing Group earlier this month marked its sixth deal and the deployment of £500m of capital in just over 18 months.