French social housing

684m€ of investments as of 31/12/2022
54 transactions – 20 social landlords

Since the launch of the public sector debt platform in 2015, Rivage Investment invested €684m in French social landlords.

A total of 54 trades were made, involving 43 debt instruments and 20 social landlords. Out of these investments, approximately one third were made on the primary market; most of these investments benefit from a 100% unconditional and irrevocable guarantee granted by a local authority.

Social landlords in our portfolio comprise both public social landlords (offices publics de l’habitat) and private social landlords (entreprises sociales pour l’habitat, sociétés coopératives d’HLM and sociétés d’économie mixte de construction et de gestion de logements sociaux). The number of rental units managed by these social landlords ranges from 3.000 units to over 65.000 units.

When investing, we focus on the relative value of the investment given the credit worthiness, legal status and strategic importance of the relevant social landlord. We also take into account, where applicable, the nature and credit worthiness of the guarantor.

Investment rationale

• A highly regulated sector: various control mechanisms, limitation of authorized activities by law
• Strong financial support from the State: tax benefits, preferential financing schemes, building subsidies, public equalization fund providing financial assistance to social landlords in financial difficulty, etc.
• Very limited operational risk: collection of individualized rent subsidies (“APL“) directly from the State, stability of rental income, low vacancy rate, low delinquency rate
• A resilient sector: very limited impact of the health crisis on the financial situation of social landlords in 2020
• An essential sector: social housing represents 16% of primary residences in France and more than 2 million of social housing requests were pending at the end of 2020
• Opportunity to finance a sector with a high social and environmental impact
• A key sector in terms of climate action: energy-efficient housing, zero net land take objective, etc.

Partenord Habitat

Partenord Habitat is in charge of the development, maintenance and rental of residential social housing units in the Nord department (59). It is one of the largest social landlords in France with 53,718 residential units under management as of YE 2021, representing approximately 20% of social housing units available in the Nord departement. As of YE 2021, it provides housing to approximately 112,000 people, a little more than 4% of the population of the Nord department, which is the most populous in France with 2.6 million inhabitants.

Partenord Habitat is a public housing office, linked by administrative decree to the Nord department.

Deal description:

2 bilateral loans originated on the primary market in 2018 and 2019, one of which benefits from a 100% unconditional and irrevocable guarantee from the Nord department.

Executive summary:

RIVP

Régie Immobilière de la Ville de Paris (RIVP) is a private social landlord incorporated as a société d’économie mixte locale. It is owned by the City of Paris (79.7%), Habitat en Région Services (a member of the BPCE group, 10.1%) and Caisse des Dépôts et Consignations (10.1%).

RIVP is in charge of developing, maintaining and renting out residential social housing units in the city of Paris. Founded in 1923, it is one of the largest social housing landlords in France and the second largest in Paris, with more than 64,000 residential units under management. 90% of RIVP’s residential units are located in Paris, the remainder being in the close vicinity of Paris.

RIVP also manages more than 36,000 parking spaces and operates 640,000 sqm of shops, offices and business premises. RIVP is the first Parisian operator of office space dedicated to start-ups.

Deal description:

3 bilateral loans originated on the primary market in 2016, 2017 and 2020 and 3 bilateral loans acquired on the secondary market in 2020. All investments benefit from a 100% unconditional and irrevocable guarantee from the City of Paris, except one which is fully guaranteed by the city of Boulogne-Billancourt.

Executive summary:

Domofrance

Domofrance is a private social landlord incorporated as an entreprise sociale pour l’habitat (ESH), also referred to as a société anonyme d’habitations à loyer modéré (SA d’HLM). It is owned by Action Logement Immobilier (holding company of the Action Logement group, 83%), Procivis Nouvelle Aquitaine (9%) and Caisse d’Epargne Poitou-Charentes (below 5%).

Founded in 1958, Domofrance is a major player in the Nouvelle-Aquitaine region. It is present in 8 departments, but primarily in Gironde (29,978 residential units under management). Approximately two thirds of its residential units are located in the perimeter of Bordeaux Métropole.

Deal description:

bilateral loan acquired on the secondary market in 2020, benefitting from a 100% unconditional and irrevocable guarantee from the intermunicipal grouping Bordeaux Métropole.

Executive summary: