L&Q completes £1.045 billion Metra Living sale to fund affordable housing

The opportunity: Delivering a complex £1.045 billion strategic disposal

As part of its long-term strategy, L&Q identified an opportunity to sell Metra Living. This would serve to simplify its operations, concentrate its resources on its core social activities, and focus further investment on delivering safe, affordable, high-quality homes for communities across the UK.

The transaction involved the sale of approximately 3,200 homes across 53 developments throughout Greater London, alongside the transfer of Metra Living’s operational platform and team.

Working alongside its UK partner Ridgeback Group, Morgan Stanley Real Estate Investing (MSREI) agreed to acquire the business in a deal valued at £1.045 billion.

As a registered charitable housing association, the sale of Metra Living will enable L&Q to focus on its core business of investing into its new and existing social homes. The deal also establishes a long-term partnership as L&Q continues to provide freeholder services to PRS homes leased within its buildings.

How our legal experts supported L&Q’s sale of Metra Living

We were jointly appointed as legal advisers to L&Q alongside international law firm Pinsent Masons, and worked collaboratively with both with Pinsent Masons and L&Q’s wider advisory team throughout the transaction.

Led by Corporate Partner Karen Procter, the transaction was supported by specialists Jay Birch, James Sparks and Natalie McCann. The team also drew on specialist expertise spanning Data Protection, Housing, Planning, Employment and Commercial law.

Throughout, our objective remained supporting L&Q to achieve its commercial objectives, while ensuring compliance with the legal, operational and regulatory considerations that go hand-in-hand with a portfolio of this scale.

Unlocking investment for affordable homes and long-term growth

Culminating in the successful £1.045 billion sale of Metra Living, the transaction marked a major milestone in L&Q’s long-term strategy.

By supporting the transaction, we helped L&Q unlock substantial value from its private rented sector portfolio – enabling the organisation to focus future investment on its core mission of delivering affordable housing for communities across the country.

The deal also established long-term partnerships with MSREI and Ridgeback Group, while ensuring continuity for residents and creating a platform for sustainable growth under fresh new ownership.

Reflections from L&Q

Commenting on the sale, Martin Watts, Director of Treasury at L&Q, said:

“We’re proud to have built a highly successful PRS business since entering the market in 2015, and the sale of Metra Living is a key milestone in delivering our long-term strategy. I have no doubt that, under the new ownership of MSREI, it will continue to go from strength to strength as a quality provider of rental homes in the UK.

“Knights and Pinsent Masons were outstanding in supporting L&Q through this transaction. Their collaborative approach, commercial insight and unwavering strategic focus were instrumental in getting this deal over the line.

“It’s been a genuine partnership to achieve this deal. They worked seamlessly alongside our teams, navigating large complexity with clarity and pace over a long period of time.”

Reflections from Knights

Reflecting on the transaction, Corporate Partner Karen Procter said:

“We are thrilled to have supported the L&Q team through this complex transaction, which allows the business to focus fully on its strategy to provide the very best social homes that residents and landlords alike can be proud of.

“L&Q is nationally renowned for helping people find happiness in where they live, and we’re proud to have played a small part in supporting the delivery of its longer-term objectives to build more affordable homes.

“It has been a pleasure working collaboratively with Jon and the team at Pinsent Masons in advising L&Q, and we’re delighted to have been able to play a part in getting this important deal over the finish line.”

Key results, in review:

• Supported the sale of L&Q’s private rented sector business and operational platform.
• Helped unlock substantial capital for reinvestment into social and affordable housing.
• Established a long-term partnership between L&Q and the new owners.
• Delivered a complex, multi-disciplinary transaction involving multiple advisers.