Croydon seeks institutional cash for housing development
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Photo (cropped): Elmira College, Flickr
Croydon Council’s housing development company — believed to have the largest pipeline of any similar vehicle in the UK — says it will look to raise institutional cash in order to diversify away from the Public Works Loan Board.
The Brick by Brick (BxB) vehicle has already submitted 28 planning applications for a total of 540 homes, with another 18 schemes totalling 626 homes at the pre-application discussions stage.
Much of this is backed by PWLB funding, but the council is now looking to fund a larger development of 1,100 homes in Croydon town centre using institutional or pension fund cash.
Colm Lacey, director of development at the council and managing director of BxB, told Room151: “The council already has a very significant amount of PWLB borrowing. This is a large scale project and from a risk point of view we need to diversify our sources of funding.
“Institutional funding is broadly comparable in terms of cost at the moment.”
Lacey said that he had met a number of institutional investors during the recent MIPIM property conference in Cannes, France, who had expressed an interest in the scheme.
He said: “We will be lining up a few meetings to see whether our models fit each other.”
Lacey added that institutional investors are attracted to the model — which utilises land owned by the local authority — because they are currently struggling to find suitable sites for development.
The BxB programme is aimed at providing housing for sale, but Lacey said the company would consider providing some units as private sector rental — a model currently favoured by pension funds seeking long-term income.
The 1,100 home scheme is the second phase of an overall scheme of 2,500 homes for Croydon town centre which already has outline planning permission.
Lacey said that a detailed application for the housing element of the new phase will only be submitted after a detailed financial agreement is reached.
