JV’s £500m investment signals appetite for later living
A newly formed partnership between Legal & General and NatWest Pension Trustee could see the delivery of more than 5,000 later living homes over the next 15 years.
The £500m joint venture aims to develop retirement villages across 34 sites nationally, with the North West earmarked as a target area.
Inspired Villages, which has a pre-existing agreement with Legal & General, is to operate the portfolio, predicted by L&G to have a GDV of around £4bn.
At present, only one of Inspired Villages’ six retirement communities is in the North West, a 162-home facility called Gifford Lea in Cheshire.
However, the country’s ageing population has created rising demand for later living communities across the UK, prompting the formation of the NatWest/L&G joint venture.
Currently there are more than 12 million over 65s in the UK and this figure is expected to increase to nearly 18 million by 2040.
Specialist accommodation is lacking, though: there are currently only 78,000 later living homes in the country and only around 7,000 new units delivered each year, according to L&G.
Under the terms of the joint venture agreement, NatWest has committed to acquiring all the developed fully occupied villages outright, placing them into an operational fund. The developed villages would continue to be managed by Inspired Villages.
In addition, Legal & General has sold a 50% stake in Inspired Villages’ first 11 sites to NatWest based on an enterprise value of more than £300m, allowing it to reinvest equity back into Inspired Villages to support its future pipeline.
Robert Waugh, chief executive of NatWest Pension Trustee, said: “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.”
Laura Mason, chief executive of Legal & General Capital, said: “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.”