NatWest pension fund invests in later-living housing

The 15-year JV will see £500m invested in later-living communities, which will be developed and operated by property management company Inspired Villages.

The deal will support Inspired Villages’ next stage of growth as it scales up its ambitions to deliver net-zero-carbon later-living communities across the UK to meet the fast-growing need for specialist accommodation for older people.

Inspired Villages was established by the Inspired management team and Legal & General Capital, Legal & General Group’s alternative asset platform, in August 2017.

As part of the new JV, Legal & General has sold a 50 per cent stake in Inspired Villages’ first 11 sites to the NatWest pension fund based on an enterprise value of more than £300m. The sale will allow L&G to reinvest equity back into the business and support its future pipeline. Inspired Villages currently has six operational villages with 919 residents and four sites under construction. 

The JV has a commitment to back a portfolio of 34 sites, equating to around 5,100 homes, 8,000 residents and an estimated gross development value of around £4bn.The pension fund 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. This has the potential to create an investment platform that will allow other pension funds to access and invest in the sector via mature assets, allowing UK pension money to be deployed at scale in order to match long-term liabilities and back great outcomes for later living and UK society.

Robert Waugh, chief executive officer of NatWest Pension Trustee, commented: “The investment potential of the later-living sector is substantial as the need to support our ageing population increases.” 

He continued: “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. As Inspired Villages continues to mature and grow its portfolio, we are excited to be coming on board to support its expansion.”