Nuveen Real Estate is to plunge into the increasingly popular world of UK affordable housing, in a joint venture with registered provider Preferred Homes.

The partnership already has three sites for 'extra care' housing and affordable retirement living close to town centres, which will be its focus.

The sites will be delivered in well-connected locations with good access to public transport, targeting BREEAM Very Good status as a minimum standard on completion of development. Cycle stores will also be integrated into all designs and electric charging points to be provided in the car parks.

The move is on behalf of the TIAA General Account, TIAA being the giant U.S. pension fund that owns Nuveen, and is also backed by Ashbourne Capital Partners.

Ashbourne formed Preferred Homes in April 2020, enabling the joint venture to directly own and manage affordable housing assets.

Retirement living is expected to grow rapidly as investors spot an opportunity to create platforms that will be scalable. Data from Colliers suggested the scope for growth. Senior living accounts for about 6% of housing in Australia, New Zealand and the U.S., but just 1% in the UK.

Experts in the sector said this is likely to mean a concentration on under-provided but relatively well-heeled areas, at least to start with. So-called “underserved premium customers” in locations like Bath, Chester and Oxford, as well as London, are likely to be early beneficiaries of new-build schemes.

“We have identified an opportunity to be an early mover in this emerging sector which offers huge scalability potential in the UK,” Nuveen Managing Director of European Housing Strategies Bill Bateman said.

Nuveen is unlikely to be the last into a sector that is seeing increasing investor curiosity. Last month a study by the British Property Federation and Legal & General suggested a £10B a year affordable housing capital market could be created if government sends the right policy signals.

New and expanding entrants include Blackstone’s £700M partnership with housing provider Sage, Legal & General Affordable Homes, Patron Capital and Abu Dhabi's ADIA sovereign wealth fund and PGIM Real Estate.