Legal & General has formed a joint venture with NatWest’s pension fund to build a £4 billion portfolio of retirement homes with net zero carbon emissions.
They are investing £500 million in a 50-50 venture to fund the development of 5,100 homes in 34 schemes around Britain. The deal is thought to be the UK’s largest investment in retirement homes.
The homes will be developed over 15 years by Inspired Villages, a developer and operator established by Legal & General in 2017. They will have an end value of about £4 billion.
There are more than 12 million over-65s in the UK and that figure is expected to rise to nearly 18 million by 2040. However, there are only 78,000 retirement homes and only about 7,000 new ones are being built each year. Inspired Living develops “later living” communities in the suburbs and the countryside. Its homes start at £230,000 and have an average sale price of about £375,000. They cost about £3,000 per month to rent, including service charges.
A typical scheme has about 150 apartments surrounding a core building with facilities such as restaurants, cafés, bars, swimming pools and fitness studios. The developer uses renewable energy sources such as solar panels, electric vehicle charging, improved insulation and ground-source heat pumps to achieve net zero emissions.
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NatWest Pension Trustee Limited has £53 billion of assets. Once each village is completed and sold, it will acquire them outright from the joint venture and will place them in an operational fund. Inspired Villages will continue to manage them.
