Hightown secures £125m investment with UK and US investors

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Hightown Housing Association has completed on a £125m secured green private placement with six investors to fund its ongoing housebuilding programme.

The housing association, with homes in Luton, launched a transaction to the market in September 2023 for a new green private placement and received bids from both new and existing investors based in the UK and North America. The order book was over four times oversubscribed. Based on the bids received, Hightown elected to borrow £45m on a 10-year tenor, £40m on a 12-year tenor and a further £40m on a 20-year tenor.

Hightown has over 8,700 homes (70% EPC rated band B or higher) and has a strong track record of developing social housing with no exposure to outright sales activity, providing over 1,500 homes over the last three years. The Housing Association also operates over 90 care and supported housing schemes for a wide range of people.

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Currently the fastest growing Housing Association in the UK (according to a survey in Inside Housing), this transaction will enable Hightown to continue to deliver new high quality affordable housing in Hertfordshire, Bedfordshire and Buckinghamshire.

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The Association aims to complete over 1,000 new homes over the next two years to help tackle the country’s housing crisis. Its affordable housing development of 65 houses and flats on Oakley Road in Luton is due to complete in August 2024.

David Bogle, Hightown's Chief Executive, said:

“We are delighted to have been able to agree this funding from six investors, four of whom were new to Hightown. This £125m adds a welcome degree of flexibility to the funding of our development programme.

"The funds will be used to deliver energy efficient affordable homes in our core areas of Hertfordshire, Bedfordshire and Buckinghamshire where there is substantial need and demand. We are pleased to have been able to satisfy the investors both on the solidity of our current operations and also on our plans for delivering social impact, active resident involvement and sustainable homes in the future.”

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Lloyds Bank acted as sole placement agent on the deal, with Savills Financial Consultants providing treasury advice and Devonshires and Morrison Foerster providing legal advice to Hightown. Morgan, Lewis & Bockius and Pinsent Mason acted as counsel for investors. Pennington Manches Cooper managed property charging with valuation services from JLL.

Rory Brown, Director of private placements at Lloyds Bank, said:

“The building of new and sustainable homes is a pressing need across the UK, so we were delighted to work with Hightown on their successful return to the private placement market. There was strong investor support for Hightown’s strategy, with the success of the transaction also highlighting continued investor appetite for well-run housing associations providing high quality homes for their customers.”

George Flynn, Director at Savills, added:

“Savills Financial Consultants is proud to have been able to provide Hightown with independent advice and support through this important and successful transaction. It is really pleasing to see Hightown welcome new investor relationships to the organisation, ensuring a strong platform for future issues.

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"At a time when the sector is facing a multitude of challenges and uncertainties, this financing provides the organisation with valuable stability that will facilitate its continued impressive growth over the coming years.”