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Centrus expands equity credentials with new Head of Real Estate

Posted on by Georgie Knight

Centrus has appointed a new Head of Real Estate, Omer Fazal, who joins from CBRE’s real estate investment banking team.

Omer’s arrival is part of a wider strategy underway at Centrus to grow its offering across residential, healthcare and operating real estate companies with a focus on mergers and acquisitions, joint ventures and equity capital raising services. Given Centrus’ market-leading position in the affordable housing sector in the UK and Ireland, this will be a key area of focus, in particular working with a range of affordable housing providers and developers to diversify sources of funding by accessing long-term, institutional equity capital.

The appointment comes at a time where there is an increasing level of interest from institutional capital in the affordable residential sector in the UK given its secure, low-risk income profile and potential for growth with positive demand drivers and a constrained supply of good quality, affordable and professionally managed homes. In addition, the investor market is also attracted by the affordable housing sector’s very strong ESG characteristics, highlighted by the new widely adopted Sustainability Reporting Standard for Social Housing, which was published last year following a project initiated by Centrus and Peadbody.

“We are very pleased to welcome Omer to the Centrus team. This is a key part of an on-going strategy to build out our equity offering alongside our traditionally strong debt capabilities so that we can provide services to our clients right across the capital structure. As well as adding to our existing footprint in residential and social infrastructure, Omer’s focus on operational real estate will take us into another key real assets market.”

Phil Jenkins, Managing Director – Centrus

“This is an exciting time to be joining Centrus which is a clear market leader for Real Assets advisory across essential services sectors. With the ever-increasing demand from institutional investors for resilient income from robust business models, Centrus is in a unique place to provide differentiated, independent advice across residential, alternative and operational real estate sectors.”

Omer Fazal, Head of Real Estate – Centrus

Centrus initiatives demonstrate commitment to Sustainability & Zero-Carbon Agenda

Posted on by Georgie Knight

In many areas of life and economic activity, the disruption caused by COVID-19 is accelerating shifts and patterns that were already well underway before the pandemic. One positive consequence of the near cessation of economic activity and transportation in the early stages of COVID-19 was the dramatic improvement in air quality experienced across the world. This offered a glimpse of the environmental improvements that may be within reach as businesses and communities re-evaluate priorities and re-shape to take advantage of the new opportunities that have presented themselves.

Our core corporate finance business at Centrus is centred around supporting essential service industries in the residential, accommodation, transportation and infrastructure sectors, and we recognise the importance of the role that we can play in furthering our clients’ sustainability and zero carbon objectives through the efficient financing of these initiatives.

Last year Centrus, with one of our housing association (HA) clients Peabody, initiated a project involving other leading HAs, investors and market participants to help establish a credible, meaningful and comparable set of Environmental, Social and Governance (“ESG”) criteria that housing associations can use to demonstrate their impact to the financial community and other stakeholders.

Following a series of workshops and with insight gathered from lenders and investors over many months, we presented in June this year a draft White Paper www.ESGsocialhousing.co.uk which proposed sector-standard ESG criteria and metrics for discussion and consultation. A final report and set of recommendations for this industry standard framework will be published on November 10th 2020, with widespread support and commitments to adopt the framework from a range of industry participants.

This successful initiative was followed up in September by Centrus forming a new partnership with a major UK pension fund, the global sustainability consultancy, Anthesis Group, and the renewable developer and solar installer Eden Sustainable, to offer solar and other renewable energy solutions to our U.K. network utility clients.

The rationale for this latest initiative is a recognition on our part that energy efficiency, sustainability and resilience will be key in moving towards ambitious net zero-carbon targets. Targeting some of the biggest users of energy in the country makes strategic and practical sense, particularly as many of these entities have the financial stability and covenant strength to support the 20 year plus power purchase agreements that underpin the required investment. In many cases they also have the land resources to allow on-site energy generation or “behind the meter” solutions that changes the economic proposition of the investment case.  This is driven in Great Britain by the fact that according to OFGEM’s latest publications, network, environmental and social obligation costs currently make up over 40% over the average electricity bill. This means that currently those that can generate energy on their own sites and use private wires to supply their energy needs have a considerable advantage.  There is always the risk that environmental and social levies will be recovered in some other way to reduce this advantage in the future, but whilst the status quo remains, there is a growing benefit to on-site generation compared to purchasing energy via the grid. Whilst the generation of energy for internal use and the delivery of this by private wire is nothing new, what has changed is that smaller scale and mixed generation projects have become viable and are now seen as both necessary and desirable as a means of delivering ambitious carbon reduction and sustainability targets.

For many of our larger energy consuming clients, embracing long-term sustainable energy solutions can deliver both financial efficiencies while also delivering on existing environmental commitments, and allow them to become more ambitious in the goals that they set on a sustainable future. Sectors which play an important role in servicing communities within the real economy are at the heart of our business and we are committed to promoting sustainable solutions and facilitating the financing required to deliver them.

UK social housing – establishing a sector-standard approach for ESG reporting

Posted on by Georgie Knight

Housing Associations’ impact is significant, and investor interest in the UK social housing sector is strong and growing. Increasing investor interest underlines the need for the UK social housing sector to clearly highlight and report on its strong Environmental, Social and Governance (ESG) performance.

Last year, in response to increasing interest and demand, Centrus, with one of our housing association (HA) clients Peabody, initiated a project involving other leading HAs, investors and market participants to help establish a credible, meaningful and comparable set of ESG criteria that housing associations can use to demonstrate their impact to investors. We hope that the approach will be of interest to associations, lenders, investors, regulatory bodies and government.

Following a series of workshops and with insight gathered from lenders and investors over many months, we present a draft White Paper and propose sector-standard ESG criteria and metrics for discussion and consultation.

The proposed 10 themes and 42 criteria are open for consultation at www.ESGsocialhousing.co.uk from Wednesday 6 May 2020.

A series of webinars are planned in June and you can register your interest and submit feedback on the website.

The ultimate aim is to increase private capital flows into the sector to complement public investment for the benefit of residents and communities. The leadership provided by Centrus on this project underlines our commitment as a business to sustainable, modern finance and the positive role that this can play in underpinning long-term investment to communities and broader society. As the leading corporate finance advisor to the UK social housing sector, we continue to work with our clients to provide innovative solutions and thought leadership in a fast-evolving environment.