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Blackstone Might Finally Have Found A Way To Invest In U.K. Housing At Scale

Blackstone head of Europe James Seppala

Blackstone has extended its investment partnership with U.K. affordable housing provider Sage, in a tie up that could see it buy or fund more than 20,000 U.K. homes over the next few years.

Inside Housing reported that Blackstone and Sage have set up a new venture called Sage Partnerships, which will provide finance to partner with landowners like other housing associations, local authorities or private developers to fund the development of new affordable housing, particularly on schemes that have stalled or are undercapitalised.

Its previous partnership, Sage Housing, buys the affordable element of completed schemes from private developers.

Sage Partnerships will be chaired by Sir Michael Lyons, who told Inside Housing that the ventures had a target of 20,000 homes and were on track to reach this figure.

Blackstone has been a major investor in rented housing in the U.S. and Europe. It built up and then exited the largest owner of U.S. single family rented housing, Invitation Homes. In Europe, it has built up a huge portfolio of Spanish rental homes by buying distressed loans, and in Sweden it took private listed residential landlord D. Carnegie.

But in the U.K. it had not found the right way to invest in rental housing, because there were few schemes, owners or operators of scale to buy, and those that are out there are very highly priced because of the high demand and low supply.

It may not seem like a typically opportunistic sector, but Estates Gazette reported at the time the joint venture was formed that the investment was coming from Blackstone’s opportunity funds. Through its partnership with Sage it might just have found the answer to investing in U.K. housing at scale.