Alternative asset manager Gresham House is set to launch a residential property strategy targeting institutional investors and Local Government Pension Scheme (LGPS) funds.
The Gresham House Residential Secure Income Limited Partnership will help schemes access "under-addressed" UK shared ownership property investment opportunities, where it said it can deliver a quantifiable social impact.
The strategy will invest through a wholly-owned subsidiary which is a registered provider of social housing, proving investors with access to government grant-funded properties at a bulk discount.
Shared ownership arrangements allow buyers to purchase a share of a property whilst also paying rent on the remaining share. Purchasers then follow a ‘staircase' method to increase their stake at open market value.
Gresham House has said the strategy will have an initial rental yield of 3.4% per annum, increasing in line with the Retail Prices Index plus 0.5% each year. It will target an unlevered post-fee internal rate of return of 6.4% and a dividend yield in excess of 3% per annum.
Investment manager Ben Fry said: "Undersupply and decreasing affordability are pushing home ownership beyond the reach of many in the UK today. Four million people meet the income requirements for shared ownership compared to outright purchase.
"Through our status as an registered provider, we are able to help address the housing crisis by providing much needed affordable homes whilst offering investors access to an under-addressed market."
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