- More than £70m will fund 139 new rental homes.
- Investment comes from £2bn UK Real Estate Fund.
- Marks first step into single-family housing for the pool.
Border to Coast Pensions Partnership, the largest pool within the Local Government Pension Scheme, has agreed to invest more than £70 million in a new rental housing development in Cambridge.
The deal will fund the construction of 139 homes at Springstead Village, including 93 houses and 46 apartments. The forward funding arrangement was advised by Aberdeen Investments and represents Border to Coast’s first move into single-family rental housing.
The money comes from the partnership’s UK Real Estate Fund, which has attracted £2 billion in commitments from 10 of its partner pension funds since October 2024.
A pension fund steps into housing
The development forms part of Springstead Village, a joint venture between housebuilder Bellway and Latimer, which is part of Clarion Housing Group. The wider scheme includes plans for a primary and secondary school, a community hub, green spaces and allotments.
All homes are expected to have a minimum EPC B rating, placing them in the higher tier of energy efficiency. That could help keep running costs lower for tenants, while also meeting environmental targets.
This marks a notable shift for Border to Coast. Local government pension funds have traditionally invested in more established property sectors, but pooling assets has allowed them to access areas such as build-to-rent housing, which might previously have been out of reach.
Joe McDonnell, chief investment officer at Border to Coast, said the UK faces a shortage of quality rental homes and that the Cambridge project is intended to address part of that gap, as quoted in a news report. He added that the investment aligns long-term returns for pension funds with social and economic value.
He described the transaction as evidence that pooling pension assets can open up access to opportunities across the UK property market, reportedly saying the fund aims to direct long-term capital into domestic growth sectors.
Why Cambridge?
Cambridge is widely seen as a strong location for rental housing, supported by a shortage of new homes and a growing workforce. The city sits at the centre of what is often called the “Cambridge Cluster” or “Silicon Fen”, home to technology and life sciences firms.
Major employment hubs such as Cambridge Science Park and the Cambridge Biomedical Campus anchor the so-called Golden Triangle of life sciences between Cambridge, Oxford and London. That concentration of skilled workers has driven sustained housing demand in the area.
For Border to Coast’s partner funds, which ultimately support the pensions of millions of local government workers, the move suggests a focus on income-generating UK assets at a time when housing shortages remain high on the political agenda.
Whether more LGPS pools follow into single-family rental housing may depend on how projects such as Springstead Village perform in the years ahead.
