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Centrus arranges a £20m loan facility for Cromwood Housing to tackle rough sleeping in London

Registered Provider, Cromwood Housing Ltd has announced the signing of a new c.£20m loan facility with BAE Systems Pension Funds Investment Management Ltd as part of a Greater London Authority (“GLA”) led scheme aimed at eradicating rough sleeping.

Earlier this year, Cromwood was allocated a total of £9.4m grant funding by the GLA under its 2020/2021 Rough Sleeping Accommodation Programme (“RSAP”). The grant award along with the new debt facility will enable Cromwood to proceed with the acquisition of 135 flats which will provide long term, move-on, housing for those sleeping rough in London. Cromwood has partnered with Thames Reach, a London-based charity which works with people affected by rough sleeping to deliver this project.

This is the successful culmination of a 5-year strategy which saw Cromwood identify the best way to better provide social housing solutions to local authorities, was through the acquisition of its own stock and not just reliance on the procurement of properties from private landlords.

Moses Hirschler, CEO of Cromwood, explained We connect all the constituent pieces together to deliver long term housing solutions, enable local authorities to do more and reduce the insecurities of those without housing. This joint venture epitomises our role in the industry as well as demonstrating our passion to deliver societal impact.

The new facility, which was arranged and structured by Centrus, has a fixed rate 15-year term in line with the GLA nominations agreement and is secured against the cashflow from the acquired properties.

Phil Jenkins, who led the team from Centrus arranging the transaction, said We are very pleased to have supported Moses and the Cromwood team on this successful and innovative financing. At a time when investors are increasingly focused on social impact, the financing of this scheme which will have a direct and positive impact on the lives of those concerned is the clearest possible example of what we describe as finance with purpose.
David Cryer, who led the team from BAE Systems Pension Funds Investment Management Ltd, commented I have been investing in the social housing sector for over 20 years and this deal has been one of the most innovative I have been involved in. It offers excellent returns for the pension fund as well as helping to alleviate the problem of rough sleeping in London.
David Fletcher of non-profit group Social Finance, who advised Cromwood, said It has been exciting to work with Cromwood, which is dedicated to increasing the availability of social housing in London, together with Centrus and BAE whose innovative approach has helped make it possible.

Press release date: 7th June 2021