Investment firm, Thriving Investments, secures £40 million from institutional backers for a fund devoted to constructing and managing residences for essential workers.
Affordable Housing Push in Greater Manchester: UK Pension Funds and Investors Back Thriving Initiatives
UK pension funds, led by the Greater Manchester Pension Fund (GMPF), are making significant strides in addressing the housing crisis in Greater Manchester by investing in affordable housing projects for essential workers and vulnerable populations.
In a joint venture with Manchester Council, GMPF is partnering with Thriving Investments to deliver affordable housing through the 'New Avenue Living' platform brand. The strategy aims to provide high-quality, affordable housing, with a significant portion at rents aligned to local incomes.
The new fund, which has raised £40m so far, is targeting a total of £200m. 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.
The fund manager for Thriving Investments will work with local SMEs to deliver sustainable homes in key regional UK cities. The initiative, which includes projects in Longsight, Monsall, Ancoats, Beswick, Ardwick, and Piccadilly, is expected to deliver over 1,500 new homes.
In Piccadilly alone, 126 new homes will be developed at Postal Street, with 20% allocated for affordable housing at Manchester Living Rent. The fund's place-based impact thesis also aims to boost local economies.
The GMPF has also invested £20 million in Resonance’s National Homelessness Property Fund 2 to refurbish 160 homes in Northwest England for formerly homeless families, providing stable accommodation for 259 people, including 89 children. This investment is part of a broader £174 million housing fund supported by multiple UK pension funds focused on social impact through housing.
The UK government is encouraging pension funds and other institutional investors to invest in the construction of affordable homes. This push is particularly relevant in Greater Manchester, where market rents have jumped 27.5% over the past two years, making them increasingly unaffordable for essential workers. Manchester Mayor, Andy Burnham, has pledged to build 75,000 new homes to ease the housing crisis by 2029.
Thriving Investments has adopted social impact and ESG metrics to measure local community impact. The metrics include apprenticeships, training, brownfield land regeneration, and community contributions. The Scottish fund, New Avenue Living Fund Scotland, has delivered 742 new affordable homes and is on track to deliver around 1,200 homes for essential workers.
The £10m loan to Thriving Investments from the GMCA is an innovative approach that sees public sector investment being used to drive the provision of affordable homes. This strategic use of institutional capital aims to address both new affordable housing supply and refurbishment of existing stock, targeting essential workers, low-income residents, and those experiencing homelessness.
Future engagement with local communities and formal consultations are planned to refine and expand these housing projects across Greater Manchester. Thriving Investments is open to speaking with institutional investors, including Local Government Pension Schemes, to facilitate further equity fund closes over time to grow its social impact led investment approach.
This collaborative effort between the public and private sectors underscores a commitment to addressing the housing crisis in Greater Manchester and providing affordable housing for those who need it most.
[1] Greater Manchester Combined Authority Press Release [2] Resonance Press Release [3] Third Sector [4] Manchester Evening News [5] Property Week
- The Greater Manchester Pension Fund, in partnership with other UK investors, is focusing on the energy transition and social impact through development finance, aiming to tackle the housing crisis by investing in affordable housing initiatives.
- In an effort to create thriving businesses while addressing affordable housing, Thriving Investments is leveraging various financial resources, such as pension funds and loans from the GMCA, to develop sustainable homes for essential workers and low-income residents.
- The Greater Manchester Pension Fund is not only investing in new housing projects but also supporting innovative refurbishment plans for existing homes, as seen in their partnership with Resonance's National Homelessness Property Fund 2.
- Institutional investors like the Greater Manchester Pension Fund and Thriving Investments are adopting ESG (Environmental, Social, Governance) metrics and incorporating social impact strategies, such as apprenticeships, training, and regeneration of brownfield land, within their real-estate development plans.
- Looking ahead, pension funds and investment firms continue to seek opportunities to collaborate with local government entities, enhancing their financial holdings while contributing significantly to the affordable housing crisis in Greater Manchester and other UK regions.
