NatWest scheme invests in net zero retirement villages
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
The £53bn NatWest Group Pension Fund and Legal & General have formed a 15-year joint venture investing £500m of equity in Inspired Villages to build net zero later living communities.
The NatWest fund has also committed to acquiring all the developed fully occupied villages outright, placing them into an ‘Operational Fund’. The developed villages will continue to be managed by Inspired Villages to provide ongoing resident services. This has the potential over time to create an investment platform that allows other pension funds to access and invest in the sector via mature assets, according to L&G.
Inspired Villages was established by the firm's management team and Legal & General Capital in August 2017. As part of the new JV, L&G has sold a 50% stake in Inspired Villages’ first 11 sites to the NatWest pension fund based on an enterprise value of over £300m.
Inspired Villages currently has six operational villages with 919 residents and four sites under construction. It has a commitment to back a portfolio of 34 sites, consisting of around 5,100 homes, 8,000 residents and an estimated gross development value of around £4bn.
Inspired Villages was established by the firm's management team and Legal & General Capital in August 2017. As part of the new JV, L&G has sold a 50% stake in Inspired Villages’ first 11 sites to the NatWest pension fund based on an enterprise value of over £300m.
Inspired Villages currently has six operational villages with 919 residents and four sites under construction. It has a commitment to back a portfolio of 34 sites, consisting of around 5,100 homes, 8,000 residents and an estimated gross development value of around £4bn.
It broke ground for its first two net-zero carbon investments in regulated energy developments in Bedfordshire and Hampshire earlier this year, using on-site photovoltaics, EV-charging, improved building fabric and insultation, Mechanical Heat Vent Recovery units and ground-source heat pumps. The ground source heat pump system will be the largest of its kind to date to be delivered by Kensa Group, according to L&G, which is also a backer of Kensa.
Inspired Villages aims to support over-65s in living healthier, independent lives for longer so that they can remain in their own home as they age, taking pressure off health and care services, whilst combating loneliness.
L&G said despite there being more than 12m over-65s in the UK, a figure expected to increase by 41% to nearly 18m by 2040, there are currently only 78,000 later living homes and only around 7,000 new units delivered each year.
“The investment potential of the later living sector is substantial as the need to support our ageing population increases. This new partnership with Legal & General and Inspired Villages aligns perfectly with our ambitions to invest in areas that present strong social and environment credentials, whilst offering a good match for our long-dated liabilities," said chief executive of the NatWest Pension Fund, Robert Waugh.
Laura Mason, CEO of Legal & General Capital, added: “This transaction is unique as it sees one of the largest UK pension funds investing directly into UK private social infrastructure. Broadening the range of growth assets that pension money can access is an important step forward for the UK’s growth agenda and economic future, allowing our country’s savings to support the UK in building back better, address climate change and tackle the major issues society is facing. We hope to see further deals like this follow.”
