The investment is London-based M&G’s second in Greencore Homes, having previously taken a majority stake in the builder of modular, low carbon homes.
M&G Investments has made a £30m (€35m) investment in UK-based Greencore Homes, which makes modular, energy efficient homes, adding to a £15m investment in 2022, which gave M&G a majority stake in Greencore.
Both investments were made through M&G’s Catalyst, a £5bn private assets strategy, investing in companies innovating to solve environmental and social challenges. The Catalyst team manages the strategy on behalf of the £126bn Prudential With-Profits Fund.
The equity investment will underpin an expansion of Greencore’s business, initially through land acquisitions across south-east England. The housebuilder is aiming to build 10,000 homes in the next decade.
Greencore currently operates from a factory in Bicester, central England, where it builds timber-frame panels, which are insulated with natural materials including hemp, lime and wood-fibre. These panels are then assembled on the site where the property is to be located over a period of a few days. Greencore’s said its onsite assembly method differed from other approaches to modular housebuilding where full structures or modules were built offsite.
M&G says Greencore’s homes achieve a net-zero carbon balance in operation and aim to be “better than net zero” in terms of embodied carbon in the structure. Their energy efficiency also makes them cheap to run.
Greencore, led by CEO John Di-Stefano, currently employs 40 people and plans to develop additional factories around the country. The Bicester factory is capable of producing panels for more than 200 homes per year. Future factories are expected to have a larger capacity.
Zach Webb, head of European Investments in Catalyst, describes Greencore’s approach as a unique, disruptive solution with huge potential to scale.
“Our extra investment will create opportunities to deliver urgently needed high quality, ultra-low carbon homes, using methods and materials that showcase what the future of the UK housebuilding industry could look like,” he said
The company said it was also looking for new partnerships to deliver affordable and private housing for rent and sale to add to an existing partnership with M&G Real Estate.
Acute housing challenges
A number of housebuilders such as Greencore are seeking to address the UK’s housing challenges. The country has one of Europe’s most acute housing shortages and its housing stock, which is also among the least efficient on the continent, according to recent reports.
That has prompted more funds from social impact investors to be directed towards the sector, particularly in the area of affordable housing. Investment manager Octopus Investments said recently it had raised a further £10m for its Affordable Housing Fund from Big Society Capital (BSC), on top of a £50m first close for the fund. Meanwhile, local authority pension funds are directing more of their investments towards the sector, including that of Avon in south-west England.
