Blackstone’s affordable housing turnover triples

Blackstone’s affordable housing provider Sage has reported total revenue of £94m in 2020, up almost threefold on the previous year. The UK’s first for-profit registered provider maintained a pre-tax loss in the year, taking a £25.9m hit, following a £27.8m pre-tax loss in 2019. While many housing associations have seen delivery and targets slashed due to rising fire safety costs and deepening losses, Sage has continued to plough funds into new acquisitions. The private equity-owned company has an ambitious five-year plan to become the UK’s largest provider of social housing, with a portfolio of 20,000 homes by 2022. Sage invested £333m on new affordable homes in 2020, up by 2% on 2019 levels. The company invested £397m buying new housing, but secured £279.2m through disposals – this was largely through the sale of 1,609 new homes to its sister company Sage Rented, raising £220m via a CMBS. The transaction was the first social bond CMBS-style offering in European social housing and the first public offering for Sage. The sister company agreed a £50m unsecured loan to Sage. The group delivered 2,142 new homes during the year, a 57% increase on the previous year. It has agreements signed with developers for a further 4,254 homes and negotiations are in play for a further 3,135. Sage has now committed to deliver 12,663 affordable homes across 305 sites, with an investment value above £2bn. The company claims it is “well on track” to deliver 20,000 homes by 2022, which it says will see it become the largest contributor to new affordable housing in the UK. It has a target to add a further 4,000 homes in the 2021 financial year. During the year, new contracts included a development agreement with Barnet Council to buy 142 affordable homes at Upper and Lower Fosters. Sage has laid the groundwork to become an investment partner for the Greater London Authority and deliver homes through the mayor’s affordable homes programme. In 2020, Sage increased its RCF capacity from £380m to £580m, with two new lenders joining. It had utilised £349m by the year end, up from £283m at the end of 2019. Chief executive Mark Sater joined Sage on an interim basis in August 2020. He was previously an adviser to Regis Group, which started Sage in 2017 as the UK’s first for-profit RP, before bringing Blackstone on as majority owner. The parent company joint venture vehicle is Sage Investments Sàrl, which has provided Sage with an unsecured loan of £270m. The maximum value increased from £214m in 2019, and had an outstanding balance of £243.5m at the end of the year. Sage’s portfolio was valued at £523.3m, up 25% from £417.4m a year earlier. Including Sage Rental this figure rises to £718.5m, with total revenue of £96m. Chair Alison Thain, said: “To fund the new homes needed by our residents, we are bringing new sources of capital to the task of tackling the country’s need for affordable housing. “Sage remains focused on delivering high-quality, energy efficient affordable homes and will continue to engage our communities to provide the homes our residents appreciate. We intend to further increase our delivery of additional affordable homes through working closely with our delivery partners, local authorities, Homes England and the GLA.” To send feedback, e-mail emma.rosser@eg.co.uk or tweet @EmmaARosser or @EGPropertyNews Image © West Midlands Combined Authority