McCarthy & Stone registers for-profit RP as it targets ‘tenure choice’
Retirement communities developer McCarthy & Stone has established a for-profit registered provider as it looks to offer “increased choice of tenure” to its customers.
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The Bournemouth-headquartered company is a major house builder and manager of retirement living, with a historic focus on outright sales.
However in recent years its strategy has shifted to a multi-tenure approach, including private rent and shared ownership, as a key part of future growth plans.
In October 2020, McCarthy & Stone announced that it had signed a partnership with housing association Anchor Hanover, England’s largest specialist provider of housing and care. This will see the partners deliver 482 units across five large-scale sites, currently owned by the house builder, and will deliver a range of tenures including outright sale, extra care, affordable rent and shared ownership.
However, McCarthy & Stone’s registration of a for-profit provider is not connected to that partnership, both companies confirmed to Social Housing.
In the units to be created through the partnership, McCarthy & Stone will exclusively provide outright purchase and private rental. Anchor Hanover will separately acquire and manage its own properties, paying a total of £67m for the development of 316 extra care apartments, aimed at those in greatest need of supported housing and care.
Long-term strategy
News of the new for-profit emerged in data published by the Regulator of Social Housing yesterday, showing that ‘McCarthy & Stone (Shared Ownership) Limited’ achieved registered provider status on 4 February. The developer incorporated a company in the same name in November 2019.
In a statement shared with Social Housing, a spokesperson for McCarthy and Stone said: “We are pleased that McCarthy & Stone (Shared Ownership) Limited has been registered with the Regulator of Social Housing.
“It is a key part of our long-term strategy to offer our customers increased choice of tenure and help more people access the many benefits of living in high-quality retirement and extra-care housing. In future we will be able to offer our customers a full range of tenures, including affordable shared ownership, outright ownership, private rent and private shared ownership.”
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Multi-tenure
McCarthy & Stone set out at the time of its last full-year report that a new multi-tenure strategy would form a key part of future growth. The publication showed that in the 14 months to 31 October 2019, 2,301 sales were made, including 47 shared ownership properties, alongside 101 rental transactions.
By the time of a trading update in November 2020, McCarthy & Stone reported that 265 “multi-tenure transactions” had occurred in the financial year ended 31 October 2020. These included 41 part-buy, part-rent units, and 58 Rent to Buy.
Paul Lester, its group non-executive chair, wrote in the earlier (2019) report that the new strategy was aimed at “helping address a challenging secondary housing market and enabling [the group] to tap into broader demand for retirement housing”. He added that rental and multi-tenure would form a larger part of the overall volumes in the next year as the group progresses towards securing third-party investment.
That outside investment effort crystallised on 1 February as the group’s board announced that it had reached an agreement on the terms of the £647m recommended takeover offer from major US private equity investor Lone Star Real Estate.
The transaction saw the retirement developer delist its shares from the premium-listed segment of the London Stock Exchange’s main market, for the second time in its four decades of operation.
Affordable retirement
The potential of affordable and rented segments of retirement living has attracted increasing attention from developers and investors in recent years. Last year, real estate private equity firm Ashbourne Capital Partners launched a new for-profit registered provider that it said would seek to become a “significant provider” of extra-care accommodation at affordable rents, using Homes England grant.
Registered provider Preferred Homes Limited (PHL) said that it would act as developer, investor, owner and manager of the properties, which would be let to tenants directly via local authority nomination agreements.
Findlay MacAlpine, PHL’s chief executive and a director and founder of financial backers Ashbourne Capital Partners, told Social Housing at the time that PHL will harness Homes England grant to deliver “the right quality of product but at a highly affordable level of rent to those occupying”.
Social Housing has asked McCarthy & Stone whether its new RP will look to access government grant.
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