Westminster City Council is considering a new impact investment opportunity that would see the Pension Fund provide a loan for the purchase of temporary accommodation properties.
The Pension Fund Committee discussed the proposal at its meeting on 16 October 2025, according to the agenda and reports pack for the meeting.
The proposal involves the Pension Fund providing a loan to a separate legal entity, likely a Limited Liability Partnership (LLP), which would then purchase temporary accommodation properties from the council and lease them back under a credit tenant lease structure. The council's Aa3 credit rating would underpin the credit tenant lease arrangement.
The council believes this investment would provide the pension fund with several benefits:
- Secure, risk-adjusted returns
- Inflation protection
- Predictable cash flows
- Impact benefits aligned with the fund's responsible investment beliefs
The report noted that temporary accommodation is an underserved area of housing supply, particularly as homelessness increases. Councillor Robert Eagleton (Deputy Cabinet Member - Housing), Councillor Maggie Carman (Deputy Cabinet Member - Adult Social Care, Supported and Specialist Housing), Councillor Ed Pitt Ford, Councillor Ryan Jude (Cabinet Member - Climate, Ecology, Culture and Air Quality) and Councillor Tim Mitchell were present at the meeting.
The investment aims to secure temporary accommodation, provide operational certainty for the council, and generate a capital receipt to extend the council's capital budget for temporary accommodation.
Further details on specific target return objectives, expected legal fees, and the draft actuarial results are included in the exempt appendix one of the Temporary Accommodation Impact Investment Opportunity report.
