The Scottish National Investment Bank said it has committed a further £20 million to the Mid-Market Rent (MMR) strategy (New Avenue Living) managed by Thriving Investments, the social value and ESG-focused real estate fund manager.

The bank’s follow-on investment will support the development of up to 100 new homes and takes its total investment in the fund to £60 million.

New Avenue Living, which has a mandate to build 1,500 high-quality, energy efficient homes within close proximity to major Scottish city centres, has to date delivered 649 homes, with another 422 currently in development.

The homes are rented out at reduced rates on the open market, helping to deliver the much-needed supply of affordable homes.

“In line with Thriving Investments’ wider commitment to create and regenerate residential-led communities through both an environmental and social lens, the current investment portfolio aims to deliver EPC B rated or higher homes,” said the bank.

“Additional social impact and ESG metrics have also been adopted to measure apprenticeships, training, brownfield land regeneration and community contributions.

“Other investors in the Fund include Strathclyde Pension Fund, which last year committed a further £20 million as well as Nationwide Building Society Pension Fund, and Places for People Scotland.

“Launched in 2018, the strategy is underpinned by a low-interest loan from the Scottish Government and has acquired nine sites across Edinburgh, Leith, Glasgow, Paisley, and Midlothian to date.”

William Kyle, Fund Director for Thriving Investments, said: “The role of private capital in meeting the shortfall of housing in the UK has never been more critical, and we recognise our responsibility as stewards of that capital to showcase the pace and scale that can be achieved with the right platform.

“The Scottish National Investment Bank’s continued support is a strong endorsement of our differentiated structure and approach, reflecting the unique combination of social value and competitive and stable long term, day-one returns that the Fund offers, as well as the resilience of the asset class against what has been one of the most volatile macroeconomic backdrops of recent memory.

“We continue to work with our development partners to ensure the suitability of our end product against a constantly evolving consumer and regulatory backdrop. Environmental standards are a key priority, in particular energy efficiency and sustainable heating sources, which has seen us exploring sites with access to district heat.”

Andy Clapp, Portfolio Director at Scottish National Investment Bank, said: “A safe and affordable home is the foundation for an individual, a family and a community to thrive. We are delighted to increase our investment in the New Avenue Living Fund, managed by Thriving Investments, to help build much needed homes in Scotland.

“This investment aligns to our mission to transform communities. We recognise the importance of public and private sector partners working together to deliver the homes that people need, in the right places and at a price they can afford.

“We are particularly pleased the Fund is future-proofing the homes it builds by ensuring they are energy efficient, working toward net zero targets.”