Newydd Housing Association is set to undertake a significant programme of investment in existing and new homes in mid and south Wales after agreeing a new £45m funding package with Danske Bank.
The structured loan facility is Danske Bank’s first deal with a housing association in Wales and will be used to fund ongoing investment, including upgrades and updates of existing homes in its portfolio and building new homes.
The facility provides Newydd with a great deal of flexibility alongside a long-term commitment from Danske. The arrangement was put in place with the support of Savills Financial Consultants, who advised Newydd through the strategic approach to the fundraising as well as the execution.
To date £15m of funding has been drawn down to invest in projects which are underway, including the third phase of its development in Llandrindod Wells, which will offer 79 new homes to local people and is being built in partnership with Newydd and Powys County Council.
Newydd has a target to deliver 600 new homes over the next five years, growing the organisation by at least 20% in terms of stock size. As well as providing attractive, affordable and accessible homes, it is focused on investing in sustainable materials and making its homes energy efficient.
For example, the timber framed homes at Llandrindod Wells, which will be completed in 2025, will be fitted with air source heat pumps and will also feature photovoltaic solar panels to help reduce both carbon footprint and energy bills, giving the properties an EPC A rating.
Danske’s funding is expected to convert to a sustainability-linked loan once the process to agree ESG KPIs has been agreed.
Lee Bolderson, Finance and Resources Director at Newydd said:
“Our new long-term partnership with Danske Bank will allow us to invest in new homes and continue upgrading existing homes to meet the ongoing demand for affordable homes in the communities we serve. Danske showed a great understanding of the social housing sector and took time to understand our history and vision for the future. We look forward to providing affordable and energy efficient homes to our tenants and customers for many years to come thanks to their support.”
Dominic O’Neill, Corporate Manager at Danske Bank, said:
“We are really pleased to complete our first housing association transaction in Wales with Newydd Housing Association. As Newydd moves forward with its plans to upgrade stock and build new affordable housing in the coming years, Danske Bank are excited to support them on this journey.
“Danske Bank has been a lead provider of finance to the social housing sector in Northern Ireland for many years and have completed a number of significant transactions in England in recent years. This transaction in Wales fits our strategic growth plan to be active in helping the sector thrive.”
Alex Morgan, Director of Savills Financial Consultants, who advised on the deal, said:
“This is a very important transaction for both Newydd and the Welsh market as a whole. It marks the first transaction for Danske in the sector and introduces a new and supportive lender for Newydd as they embark on the next phase of their growth and investment programme. We were delighted to support Newydd through each step of this transaction and look forward to seeing the impact of the investment over the coming years.”
Newydd has properties in Vale of Glamorgan, Rhondda Cynon Taff, Powys, Cardiff and Neath Port Talbot.