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Forward Funding of 78-place homeless hostel in Luton, North of London

  • Freehold acquisition of 36 x 2-bed and 6 x 1-bed flats for young and homeless people
  • Completed summer 2016
  • New 30 year FRI Lease between FAH and YMCA Bedfordshire
  • 25 minutes North of London
  • High social value delivery
  • Expected to exceed target returns

In October 2015 FAH announced the acquisition by forward funding of the freehold of Midland House in Luton. Midland House is now a 78-place hostel for YMCA Bedfordshire, part of the broader YMCA organisation, the largest and oldest youth charity in the World and a delivery partner for the Prince’s Trust. YMCA Bedfordshire, a Registered Provider, regulated by the Homes and Communities Agency in England has entered into arrangements to lease the Property from FAH.

Deal Summary

  • Freehold acquisition through a forward funding transaction, of an existing building undergoing conversion work to create 78 bed spaces in 36, 2-bed units and six 1-bed move-on flats. At ground floor there are training facilities and management offices.
  • Adopts the FAH approach of separating asset ownership from operations and service delivery.
  • Provision of significant social benefit through the housing and training of homeless and vulnerable individuals.
  • Opportunity to work with the YMCA, a leading social impact organisation, active in multiple locations in the UK.
  • Conversion works completed in June 2016.
  • Residents arrived in July and August 2016, since when there have been no vacancies other than turn-over time between departing and arriving residents.

Background

Midland House in the centre of Luton, approximately twenty five minutes to the north of London, was originally constructed as offices and has been extended and refurbished to provide a 78-place hostel. With the exception of retaining the ground floor offices and training areas this involved full internal strip-out and the addition of a further floor to incorporate six, 1-bed flats for “move-on” accommodation.

Social Delivery

The Project enabled the expansion of YMCA Bedfordshire’s activities to Luton through the provision of an additional 78 bed spaces catering for 16 to 65 year old homeless individuals, both men and women, with an emphasis on supporting the young. There are a range of training facilities providing life skills and delivery of the Prince’s Trust ‘Team’ programme.

Luton Council have a substantial need for young homeless accommodation, with more than 8,000 individuals and families on their waiting list, 800 in temporary accommodation and almost 100 in bed & breakfast, with over 500 being in the age category 16-25.

Summary

The Project combines excellent social delivery with a robust financial outcome. FAH Service Company Limited has engaged extensively with YMCA Bedfordshire to ensure that the social delivery envisaged by this Project is achieved and to broaden the working relationship between FAH and the YMCA.