MIDIS lends up to £125m to social housing firm

UK social housing association Havebury Housing has secured up to £125 million ($167.6 million; €141.4 million) from Macquarie Infrastructure Debt Investment Solutions.

MIDIS has provided a £75 million tranche with a 35-year maturity, which amortises after 20 years. It has also agreed with Havebury a £50 million shelf facility under similar terms, which can be accessed by Havebury upon request.

The deal is part of a wider £270 million debt package sealed by Havebury, supported by Lloyds, RBS and Barclays. The not-for-profit firm is expected to use the new funds to refinance some of its 6,400 existing homes and also support the development of over 1,400 new social and affordable homes over the next five years. The transaction is the first time Havebury has partnered with institutional financing.

“There’s been a noticeable increase in the number of private placements by housing associations in recent months as confidence returns to the sector, supported by the UK government’s recent announcement to reintroduce the inflation-linked rent regime in 2020,” said Gareth Edwards, an associate director in MIDIS. “Sector wide, we expect an increase in borrowing to support meeting the government’s targets to build more social and affordable homes. As a result, we see potential for institutional investors to increase their exposure to this sector.”

The MIDIS platform is currently fundraising for its second vehicle, after its first £829 million UK infrastructure debt fund became fully invested earlier this year. MIDIS II reached an £80 million first close following its launch in April.

The Havebury tie-up is the second social housing project backed by MIDIS, following its support to Cottsway Housing Association in 2015 with up to £130 million. On the equity side, Macquarie was last month shortlisted to tender for a social housing PPP in Ireland worth about €300 million. PGGM and Equitix are among separate consortia competing alongside Macquarie.