Kier Group’s new partnership launched to deliver £1bn of new UK housing

Kier Group plc, the property, residential, construction and services group, which employs over 800 people in Yorkshire, has announced a £1bn housing delivery fund.

The fund, launched by Kier Living, The Cheyne Social Property Impact Fund (managed by UK-based investment manager Cheyne Capital) & The Housing Growth Partnership (a joint venture between the HCA and Lloyds Banking Group), aims to help the public sector build 10,000 new homes across the UK.

With offices across the region including in Leeds, York, Sheffield and Barnsley, Kier is delivering major projects across Yorkshire.

The company is working with Bruntwood to construct the new development at 3 Sovereign Square in Leeds, providing over 90,000 sq ft of grade A office space, and is delivering the Yorkshire batch of the Priority Schools Building Programme. It also opened its new 8,500sq ft regional headquarters at Thorpe Park in Leeds last year.

In Sheffield, Kier is responsible for a number of schemes across the area including the new Sheffield North Active Leisure and Sports facility, new theatres at Sheffield Royal Hallamshire Hospital in a £7.6m project and the £4.9m new cataract department at Northern General Hospital.

The company’s housing maintenance business has worked in partnership with Sheffield City Council for 12 years and, in Barnsley, Kier carries out all repairs and maintenance works to 19,000 Barnsley Council homes as part of the Property Repairs and Improvement Partnership (PRIP) with Berneslai Homes Construction Services.

The New Communities Partnership, a public-private alliance supported by the HCA, will provide local authorities and housing associations with a new delivery model for building new homes on their own land, giving them the option to choose between sale and/or rental developments, and offers significant scope for affordable development.

Working with the Partnership, public sector organisations will be able to determine the appropriate mix of tenure for their site, including rental homes and homes for sale, in a model designed to meet the needs of their specific communities, without the need for grant funding.

Homes available for rent will include discounted and market-rent solutions to address housing challenges faced by key workers, the disabled and the elderly, while homes to be built for sale will include discounted sale units to help first time buyers get on the housing ladder.

It will also provide public sector clients with potential scope to derive a revenue income from their land, whilst developing in a socially responsible way that will offer local apprenticeships, wider employment and sustainable, economic benefits for communities.

With traditional developments only having delivered an average of 11% of affordable housing over the past 3 years, the partnership will provide a differentiated model that will increase significantly the amount of affordable homes built, with scope for up to 50% of each site to offer affordable development opportunities.

Lloyds Bank Commercial Banking will provide banking services and financing solutions to the Partnership

John Anderson, executive director of Kier Living said: “We are excited by the establishment of this partnership which will focus £1bn of investment into the development of much-needed housing throughout the country. It will bring scale and momentum to Kier’s tried-and-tested mixed-tenure housing delivery model, for public sector clients across the UK who hold land but don’t have the capacity to develop new housing.

“Through this unique public private sector partnership with experienced finance and development partners Kier, Cheyne and the Housing Growth Partnership, we are collectively offering an end-to-end solution to building much-needed new homes.”

Shamez Alibhai, head of Cheyne’s Social Property Impact Fund, commented: “We believe that bringing responsible private capital into the UK housing sector is necessary for tackling the increasing shortfall of genuinely affordable homes across the country. The long-term investment horizon of our socially-conscious institutional investors means that we are able to provide patient capital to work with Kier Living and the HGP in delivering a new socially-inclusive, multi-tenure building model that helps alleviate the current housing crisis.”

Andy Hulme, CEO of The Housing Growth Partnership added: “The Housing Growth Partnership was formed to address the challenge of housing supply and affordability in Britain today. Working alongside Kier Living and Cheyne Capital through the ‘New Communities Partnership’ should stimulate further growth in residential development projects and enhance access to affordable housing. The alliance will also complement our core purpose to accelerate home building throughout the UK.”