Latest News | 28th November 2023

HGP commits £15 million of equity for 300-home residential Joint Venture

Housing Growth Partnership (“HGP”), the Lloyds-backed equity investor in the UK Living sector, has committed £15 million of equity to a newly formed joint venture (“JV”) with Cayuga Homes (“Cayuga”), the Sussex based property developer. The JV will target the delivery of up to 300 homes for sale, along England’s South Coast, and is HGP’s latest investment under its Regional Growth Initiative (“RGI”) model.

The JV completed its first acquisition, the Montague Quarter Shopping Centre in Worthing, in October, with HGP investing £4.2 million. Cayuga has secured planning for the delivery of 42 energy efficient flats above the shopping centre’s commercial tenants, which include TK Maxx, Nandos, HMV as well as local shops and restaurants. Construction will begin on site in January, alongside contractor Trinity Homes, with the scheme due to complete in Q3 2025.

Alongside HGP, Paragon Development Finance (“Paragon”) has provided the JV with a £14.5 million senior acquisition and development facility to support the delivery of the scheme.

James Hutchinson, Investment Director at HGP, commented: “This JV alongside Cayuga is the latest demonstration of our continued commitment to providing SME developers with institutional equity support, to accelerate the delivery of much needed housing across the UK. This initial investment under our Regional Growth Initiative provides a blueprint for how town centre retail assets can be regenerated to meet local housing demand, in a sustainable manner, and is closely aligned with our social impact objectives.”

HGP’s RGI was established with the purpose of providing a longer-term equity commitment to SME developers & housebuilders to help realise their growth plans. The RGI provides ambitious management teams with access to a pot of institutional equity to fund multi-site growth plans, allowing them to free up their own equity to invest into their growing businesses. To date, £67 million of the c. £300 million of total equity invested by HGP has been under the RGI structure, supporting 11 SME developers and housebuilders to deliver 1,621 homes.

HGP, Paragon and Cayuga Homes previously partnered to deliver a seven-story, 33-apartment, Kingsway scheme in Hove, Brighton. HGP committed £3.2 million of equity, supporting Cayuga with site purchase and development equity as well as providing access to its unique panel of senior advisers, who can provide developers with guidance around development finance, ESG, Modern Methods of Construction, Project Management, Sales, Marketing and more. Paragon provided c. £18 million of senior debt for the delivery of the scheme, which is expected to complete in Q1 2024.

Ed Deedman, Director of Cayuga Homes commented: “Cayuga are extremely proud of our new JV with Housing Growth Partnership; we could not wish for better partners and the funding will secure the delivery of our company’s exciting pipeline of new sites across Sussex and beyond.”

Steve Mountain, Paragon Development Finance Senior Relationship Director, added: “This is an exciting scheme that will bring fresh energy into the centre of Worthing, creating a vibrant mixed-use space of residential homes, retail and leisure. We have a strong relationship with Cayuga Homes having worked with them on two previous schemes; we look forward to seeing this project take shape in the coming months.”

The Southeast continues to be a key region for HGP, where it has invested c. £95 million of equity since 2016, enabling the delivery of c. 1,550 homes.

© 2024 Housing Growth Partnership. All Rights Reserved.

Housing Growth Partnership Manager Limited, 25 Gresham Street, London, EC2V 7HN, Registered Company Number 09507116, registered in England and Wales.

Authorised and regulated by the Financial Conduct Authority, firm reference number 709515

Ensuring an inclusive environment for our colleagues and communities

A key part of how we seek to deliver our purpose is to strive to create a fully inclusive environment for all our colleagues, partnerships and communities, one that is truly representative of modern-day Britain. Quite simply, a more inclusive society is a more prosperous society, and a diverse business is a better business. That means that we also speak up and act when something feels wrong – for example, we know it’s not enough to simply not be racist, we need to find ways where can be actively anti-racist by providing allyship to our partners and colleagues. We’re an anti-racist organisation and do not tolerate hate. We will take action against discrimination and inappropriate behaviour, whether racist, sexist, homophobic, transphobic or ableist, regardless of whether this happens in our offices, over the phone or online on our social media channels. Quite simply, we believe in doing the right the thing. We know we won’t always get things right ourselves, but we are committed to always striving to do better, for our colleagues, partners and communities.

Investment Disclaimer

The information, commentary and other materials in this website (“Content”) is intended to describe the activities of Housing Growth Partnership Manager Limited (“HGP”) and does not make any offer, inducement or invitation and does not give rise to any obligation or commitment. The Content is intended to be communicated only to persons who are legally able to receive it in their jurisdiction of residence. HGP invests its own money and no person, whether or not involved in a transaction with HGP, should expect to be treated as a client of HGP and no employee or other person associated with HGP has the authority to represent or state otherwise. HGP will not provide any investment services to any person, and/or advise any person on the merits of, and /or make any recommendation to a person in relation to, the terms of any transaction. Therefore, HGP does not take responsibility for providing you with the protections that would be afforded to a client and you should seek your own independent legal, investment and tax advice as you see fit. The Content does not provide any representation or warranty or achievement of any future gains, express or implied. HGP does not accept and, to the extent permitted by law, excludes liability to any person for any loss or otherwise that may arise from relying upon or using the Content of this website.