Grand Union signs 10-year operating lease with Man GPM’s for-profit provider

Shamez Alibhai, managing director and head of community housing at Man GPM, said: “This partnership with Grand Union Housing Group is an important step forward in our delivery of community housing at Campbell Wharf. In the current economic environment, the need for high-quality, affordable rental properties has never been greater.”

Grant funding supported Habitare to provide the homes as additional affordable units over and above the Section 106 allocation on the development site. 

Dave Lakin, director of development and commercial at Grand Union, told Social Housing that the homes made available through the deal are within a “key local authority” for the association. The landlord operates across Bedfordshire, Buckinghamshire, Northamptonshire and Hertfordshire.

“The scheme is within the heart of Grand Union’s operational area, meaning it is efficient for us to take on the management role. Milton Keynes is a key local authority for us and a city where we have significant traditional social rent, affordable rent, shared ownership, intermediate rent, as well as market rent homes we manage. 

“We felt our local-based service aligned well with the additional affordable homes Man Group were providing and would result in good-quality, well-managed homes for customers.”

Habitare Homes will be the legal landlord, with whom tenants will take out an assured shorthold tenancy. 

“Customers moving in will have a five-year fixed-term tenancy, which will provide them with more security than renting in the private sector,” Mr Larkin said.

Under the terms of the operating lease with Grand Union, Habitare will pay for insurance, while the housing association will manage the homes and pay for responsive repairs. The pricing of the lease was not disclosed. 

At the end of the 10-year period there will be an option to extend the operating lease, subject to both parties’ agreement.

Mr Larkin said: “The scheme is part of a new development where the managing agent has responsibility for communal areas and the structure of the block of flats. 

“They put in place insurance for these areas, which is recharged through the service charge Habitare Homes pay. The residential homes are covered by Grand Union’s insurance.”

Asked whether the association would consider further lease deals, or other kinds of deals with for-profits, Mr Larkin said: “Grand Union is open to [considering] other opportunities, where the combination of local managing partner and private RP creates additionality and does not expose either party to inappropriate risk. They will need to align with our service delivery and operational model.”

Commenting on the deal with Man GPM, he added: “We have almost 30 years’ experience in providing affordable homes at Grand Union, and we’ll be using that knowledge to work alongside Man GPM to help them build a genuinely sustainable community in the area.”