In a resounding vote of confidence in UK modular home builder Ilke, global hedge fund giant Man Group has signed a £31m deal
The deal, which was confirmed last week, will see Ilke the modular home builder develop the 227 homes in its factory in Knaresborough, North Yorkshire, before delivering them to the 14-acre site in Grantham, Lincolnshire.
Of the 227 homes, 140 will be for affordable rent tenures, 47 will be for shared ownership and 40 will be available for private sale. Man Group will act as the developer and modular home builder Ilke will supply them.
The deal will be with Man Group’s global private markets engine, Man GPM, and will be part of its community housing strategy. The strategy has the aim of securing both social and financial returns by building affordable homes. It said its main focus is the “squeezed middle class” who do not qualify for social housing but for whom mortgages are unaffordable.
As part of the community housing strategy, Man Group also announced last year that it was looking to launch its own registered provider of social housing. It’s reported at the time that the organisation would focus on lease-based transactions with councils and housing associations but also hopes to enter into long-term management contracts with social landlords.
Man Group manages a total of $114.1bn worth of funds worldwide.
Shamez Alibhai, head of community housing and portfolio manager at Man GPM, said: “We are delighted to be making a positive contribution to ease the affordable housing shortage the UK is facing by delivering a high-quality modern development with a range of housing tenures.
“This investment demonstrates that it is possible to deliver high-quality housing, using state of the art construction methods while also creating homes that are affordable to local residents.
“The COVID-19 pandemic has highlighted the importance of essential workers and the role they play in our everyday lives. Investment in socially responsible projects such as this one is fundamental to the Man GPM’s community housing strategy and its aim of investing in projects that positively impact the lives of residents and the broader community.
“We believe the scale of the housing shortfall across the UK requires innovative solutions and importantly ones which look after people, place and planet. Delivering Ilke Homes modular housing to the Grantham site means we are not only building affordable homes but doing so in a way that also upholds our commitment to sustainable and energy-efficiency projects.”
The deal, the largest investment into the modular housing sector by an institutional investor this year, represents a huge vote of confidence in offsite manufacturing, which involves modular homes being precision engineered along production lines. The sector has garnered huge interest from investors over the past several years due to its ability to deliver high-quality, energy-efficient homes at pace.
Matthew Bench, executive director of partnerships at Ilke Homes, said: “It’s a huge vote of confidence in MMC (modern methods of construction) from the institutional marketplace and it’s fantastic that Man GPM are spearheading that investment.
“Our accredited, digitally led method of delivery continues to significantly reduce construction timelines, typically by half when compared to traditional methods, helping investors access revenue streams at the earliest possible point. Being able to meet institutional ESG (environmental, social and governance) aspirations and aligning ourselves with the shift of the investment market to single family housing further underpins our near 200% growth seen this financial year.”
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