The Good Economy helps develop a robust social impact framework for affordable housing investments

Sam Waples
Fri, January 11, 2019

We are delighted to have been commissioned by CBRE Global Investments to develop the social impact assessment framework that will be incorporated into the investment process.

CBRE Global Investors has held its first close for the CBRE UK Affordable Housing Fund (AHF), with equity commitments totaling circa £250 million exceeding the target for the first close. The capital raised is from 13 institutional investors including commitments from Big Society Capital (BSC).

AHF is a UK open-ended unlisted fund targeting institutional client capital solely investing in social and affordable housing.

The fund offers investors diversification through exposure to the residential sector with the aim of having a significant social impact. AHF will invest in housing stock in the UK, focusing on social and affordable rented housing, shared ownership as well as other tenures such as key worker housing and homeless hostels. The Fund will partner with registered providers, who will manage the homes and who will be responsible for the rental income, maintenance, property management and tenant engagement.

Head of UK Funds for CBRE Global Investors, Hannah Marshall, said that the fund seeks a 6% target total return, which meets the investment/income requirement of investors while contributing towards social impact. Hannah continued, “institutional investors are placing increasing importance on the environmental, social and governance (ESG) impacts of their investment strategies. Our strategy contributes towards our investors’ ESG targets and generates a positive social impact as we invest in the funding of homes for those households unable to afford to rent or buy in the open market.

To have Big Society Capital committing to our fund is significant. We are working with The Good Economy to develop a social impact framework which will ensure impact considerations are incorporated into our investment process.” There is currently no market standard way of measuring and reporting on a Fund’s social impact for affordable housing investments. CBRE Global Investors working together with The Good Economy, along with Big Society Capital and its other investors, are seeking to develop a robust market leading framework. Michael Ness, Head of UK, CBRE Global Investors added: “There is an increasing demand for low-risk, low-volatility, liability matching cashflows from UK institutional investors and AHF meets those requirements.

The fund complements and enhances our UK offer. AHF sits neatly within our range of products, which includes the Long Income Fund, our core Property Authorised Investment Fund (PAIF), and alongside our sizeable separate account business, offering our clients a wide range of structuring choices.”

The Affordable Housing Fund is an open-ended UK PAIF. It will invest in a mix of tenures either forward funded stock or standing assets. The first investment is expected to close in Q1 2019.