New £50m southwest London development to deliver over 100 affordable homes

Pension Insurance Corporation plc (“PIC”) has announced its first affordable housing investment of £50m to develop 125 affordable and shared ownership homes, funded with a combination of internal debt and equity.

The development was made possible through a £4.9m grant from the Mayor of London’s Affordable Housing Programme. This is the first investment as part of a long-term partnership with London Square Group, a residential developer operating in Greater London, and Square Roots, the independent affordable housing provider set up by London Square.

It aims to invest £500m over the coming years to develop affordable homes to help alleviate the housing shortage in Greater London, whilst providing cash flows to back the pensions of PIC’s policyholders.

This is PIC’s inaugural equity investment into affordable housing, helping diversify its investments in a sector in which it has invested almost £4bn as debt since 2012. PIC has a purposeful investment strategy, through which the company backs the pensions of its policyholders over decades with secure, long-term assets.

The company continues to invest significant sums in sectors which seek to address the lack of homes being created in the UK across the demographic spectrum, including regeneration leases, built to rent, and retirement living.

The 100 per cent affordable scheme, comprising 125 affordable rent and shared ownership homes, is being developed on the former Hawks Road Health Clinic site in Kingston upon Thames, Surrey, which became surplus to NHS requirements after health services were moved to other sites in the borough.

It will provide 44 apartments to be rented at London Affordable Rent (“LAR”) levels and 81 apartments available for shared ownership, with on-site amenities for residents including play space. The LAR homes will be set at rents that the Mayor of London views as ‘genuinely affordable’ and will be let to local residents who are most in need.

London Square is acting as contractor/developer, with Square Roots as the affordable provider. Construction of the main buildings is now under way. The development is expected to be completed in November 2025.

Allen Twyning, Investment Director at PIC, commented: “We are excited to be partnering with London Square and Square Roots on this development and our inaugural equity investment in social housing.

“We are also delighted that a grant was secured from the GLA Affordable Housing Programme that has made the overall scheme viable, given the high interest rate environment, and inflated building costs.”

By Matthew Neville – Senior Correspondent, Bdaily

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