SCOTLAND’S state-owned development bank has upped its investment in a fund which has a mandate to deliver 1,500 energy-efficient homes close to major Scottish city centres.

The Scottish National Investment Bank (SNIB) has invested a further £20 million to the New Avenue Living Fund, which has so far delivered 649 homes with another 422 currently under development. The homes are rented out at reduced rates on the open market, boosting the supply of much-needed affordable homes.

The latest injection from the SNIB will support the delivery of up to 100 new homes and it lifts to £60m the amount the publicly funded bank has invested in the New Living Fund. The fund is managed by Thriving Investments, the social value and ESG-focused real estate fund manager.

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Other investors include Strathclyde Pension Fund, which last year committed a further £20m, Nationwide Building Society Pension Fund, and Places for People Scotland. Launched in 2018, the strategy is underpinned by a low-interest loan from the Scottish Government and has acquired nine sites across Edinburgh, Leith, Glasgow, Paisley, and Midlothian to date.

Andy Clapp, portfolio director at the SNIB, added: “A safe and affordable home is the foundation for an individual, a family and a community to thrive. We are delighted to increase our investment in the New Avenue Living Fund, managed by Thriving Investments, to help build much-needed homes in Scotland.

“This investment aligns to our mission to transform communities. We recognise the importance of public and private sector partners working together to deliver the homes that people need, in the right places and at a price they can afford. We are particularly pleased the fund is future-proofing the homes it builds by ensuring they are energy efficient, working toward net-zero targets.”

William Kyle, fund director for Thriving Investments, said: “The role of private capital in meeting the shortfall of housing in the UK has never been more critical, and we recognise our responsibility as stewards of that capital to showcase the pace and scale that can be achieved with the right platform.

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“The Scottish National Investment Bank’s continued support is a strong endorsement of our differentiated structure and approach, reflecting the unique combination of social value and competitive and stable long-term, day-one returns that the fund offers, as well as the resilience of the asset class against what has been one of the most volatile macroeconomic backdrops of recent memory.

“We continue to work with our development partners to ensure the suitability of our end product against a constantly evolving consumer and regulatory backdrop. Environmental standards are a key priority, in particular energy efficiency and sustainable heating sources, which has seen us exploring sites with access to district heat.”