Cash from investment firm will allow housing association create 600 homes in total

Queens Cross Housing Association has secured £40 million funding to transform the Hamiltonhill area of Glasgow into a new urban suburb.

It will build 300 affordable homes for rent on the site just north of the city centre with the funding from M&G Investments. This will be complemented with a further 300 new build homes for sale. The association is currently in discussion with a range of developers to progress the project.

Queens Cross, chief executive, Shona Stephen, said: “This is just the latest piece of the jigsaw that will deliver a real transformational change to this part of the city.

“Building a relationship with an asset management company for funding is a first for Queens Cross. This innovative approach to securing investment is a great demonstration of our commitment to explore all avenues to secure the funds we need to help improve the lives of our tenants, and to build Queens Cross as an area people can be proud to call home.”

The money will also allow the association to restructure existing debt, freeing up more money to explore other development opportunities in the area.

Until 2007, housing associations generally relied on banks and the Housing Finance Corporation to meet their external funding requirements. In recent years non-bank lenders such as M&G have been providing an increasing amount of longer-term finance as banks withdraw from this market.

Mark Davie, head of social housing at M&G Investments, says: “This transaction will deliver sustainable long-term returns to our pension fund clients, secured against residential property. M&G has now invested over £6 billion in UK social housing and we are always looking for more opportunities to invest, to help address the shortage of affordable homes across the country.”

The development is on schedule to start on-site in the Spring with initial ground and drainage works.