BlackRock in £100m Scots social housing debt deal

UPDATE 1 — Wheatley Group, Scotland’s biggest social landlord, confirmed reports that it secured a £100 million debt investment deal with BlackRock Real Assets as it drives forward the country’s largest house-building programme.

Wheatley said the deal with BlackRock Real Assets came just days after its financial outlook was revised upward.

Wheatley said S&P Global Ratings revised its forecast  to “stable” from “negative” while retaining Wheatley’s A+ credit rating for its £300 million public bond, issued in November, 2014.

Wheatley, which owns or manages 83,000 homes, will use the debt financing to help develop around 3,500 new social and mid-market rented homes.

Wheatley Group chairman Alastair MacNish said: “This new funding will enable us to press ahead with supplying thousands of new affordable homes and to continue delivering excellent services to the 200,000 people we work for across Scotland.”

Wheatley Group chief executive Martin Armstrong said the deal was another huge vote of confidence in Wheatley and the social housing sector in Scotland.

“We are continuing … to combine the size and scale of the partner organisations within Wheatley to make a major contribution to addressing the shortage of affordable housing in Scotland,” said Armstrong.

Wheatley said that in the past two years it completed new-build developments in Sighthill, North Toryglen, Scotstoun and Lambhill in Glasgow, Hallglen in Falkirk and Dalmuir in Clydebank.

It said work is also underway to build hundreds of new homes in Muirhouse and Craigmillar in Edinburgh and Ibrox and Castlemilk in Glasgow.

Jonathan Stevens, head of European infrastructure debt at BlackRock, said: “This transaction is our second investment in the UK social housing sector.

“The provision of social housing is an essential service, and housing in Scotland and the rest of the UK is in short supply.

“We hope our investment makes a genuine contribution towards addressing this issue, while also providing our clients with an inherently stable, long-term cash-generating asset.”

In January, 2017, BlackRock Real Assets closed a debt investment providing long-term financing to Trafford Housing Trust in Manchester.

Wheatley is the parent of the Glasgow Housing Association.

Wheatley operates across 17 local authority areas in central Scotland and its partners also include Dunedin Canmore, Cube Housing Association, Loretto Housing Association, West Lothian Housing Partnership, Barony Housing Association, YourPlace Property Management and Lowther Homes.