International law firm, Trowers & Hamlins has advised Westminster City Council (the Council) on a transaction pursuant to which a Council owned limited liability partnership (the LLP) has been set up to acquire a portfolio of 124 homes from the Council, with the LLP paying a capital receipt to the Council and leasing the portfolio back to the Council to enable it to use the portfolio for temporary accommodation.
The LLP acquired the portfolio with funding from the Westminster Pension Fund. Under the arrangement a secured loan is made available to the LLP and then under the terms of a Credit Tenant Lease rent is payable come by the Council to the LLP. The rent under the Credit Tenant Lease is payable come what may and the level of rent is set by reference to the amount required to repay the LLP's loan on an amortising basis. This method of funding therefore enables the Council to pay for the 124 properties over a long term, in this case 40 years.
This is the second time the Council has entered into a transaction like this, with the first being to purchase a portfolio of 368 properties in April 2025 from A2Dominion with a loan from Phoenix Life.
Trowers advised on the financing arrangements with the Westminster Pension Fund, governance and the acquisition of the property portfolio which included advising on due diligence and the Credit Tenant Lease.
Imogen Fisher, Banking and Finance Partner, said:
"It is really positive to have supported Westminster City Council on this second transaction to help secure additional properties for temporary accommodation that can be paid for using long term funding at competitive rates. I and my colleagues have thoroughly enjoyed working with the fantastic team at Westminster City Council to deliver this project."
Gerald Almeroth, Executive Director of Finance and Resources at Westminster City Council said:
“Like many London Councils, Westminster continues to experience increasing demand for homelessness support and temporary accommodation. This transaction helps secure a stable supply of good quality homes within the City for residents who need them most.
This is the first time a Council has used its Pension Fund to support this type of long term leasing arrangement, bringing investment discipline and social purpose together in a genuinely innovative way. Working closely with Trowers, whose specialist advice was central to structuring this Credit Tenant Lease, the Council has delivered a solution that protects and improves vital housing stock while generating responsible, long-term outcomes for both residents and the Pension Fund.”
Multiple Trowers teams worked together on this project, including Banking and Finance, Real Estate and Governance, with key team members including Imogen Fisher, Hannah Jackson, Andy Barnard, Emma Kirby, Rob Wooliams, Bodhi Kothari and Waleed Ahmad.
