L&Q boss expects ‘global interest’ in PRS portfolio

The chief executive of London & Quadrant Housing Trust expects “global interest” for its private rented sector portfolio, put up for sale earlier this month. In her first interview since launching the sale, Fiona Fletcher-Smith told EG she made the decision to sell the housing association’s 3,147-strong portfolio to “make the business less complicated and get back its the core purpose”. The group hopes it can sell the portfolio for around £1.2bn. Alongside the operational PRS homes, which span 53 projects across London, the housing association is also looking to sell a pipeline of 2,150 homes. The goal is for both to end up with the same buyer. Both are being marketed by BNP Paribas. “We want to build new homes, and in selling the portfolio, we are also saying to investors and buyers, ‘We have a pipeline of just over 2,100 new PRS homes coming which could be of interest to anybody who buys the portfolio’,” Fletcher-Smith said. Selling expertise The chief executive said the portfolio should attract “global interest as it has been going on for 10 years with very stable assets”. L&Q generates an annual gross passing rent of £69m from the homes, with a 97% occupancy rate as of 30 September 2024. Some 84% of the portfolio has been built in the past 10 years and 99% of it is rated at EPC C or above. The housing association decided to put the portfolio on the market as a bulk deal, to be achieved via the sale of subsidiary business Metra Living. The business was set up in 2015 and now has 75 employees. In selling the subsidiary, Fletcher-Smith said L&Q is also “selling the expertise of the team that runs it”. She added: “Selling Metra will allow us to go back to a far more solid, stronger charitable core, and create financial capacity to allow us to invest in existing homes more and build a pipeline faster so we can make sure people’s homes are decent and fit-for-purpose space and hopefully start to build some more at a faster rate to help the homeless problem.” Nature of place In its social and affordable homes divisions, the housing association has a pipeline of 20,000 homes across 10 partnerships, and a goal to build 2,000 homes a year through its existing partnerships and pipeline. The team will not look to convert its current PRS pipeline into social and affordable homes, Fletcher-Smith said. “The issue for us all is although social housing is desperately needed in the country, you also must think about the nature of the place and the development you’re doing,” she added. “What we have always tried to do as a housing association is to have mixed and balanced communities. You need a mix of social housing, affordable housing, housing for sale, housing for discount market sale, and those are the sorts of communities that make the best kind of places to live.” Fletcher-Smith said government support in housing will be an added beneficiary to the sale of Metra Living. “For the first time in 14 years, we have a government talking about housing and the importance of housing. I see that as being quite an attractive situation for new investors. “The conditions are good because we have a government that actually seems to care about building housing and doing more of it – and making sure that what we build is of high quality.”