London based Local Space housing association has been reaffirmed the top rating of AA- Outlook Stable, within the social housing sector by S&P. Local Space, a registered social housing provider now in its 12th year, has retained its high AA- credit rating for the second year. The S&P report states that,
“Local Space displays a very strong enterprise profile, underpinned by the low industry risk in which it operates along with its very strong economic fundamentals and very strong strategy and management.”
Local Space was established in 2006. It owns a portfolio of circa 2,000 homes. In 2016 it began to implement its growth strategy of delivering another 800 properties, to be completed by 2020, in East London and Essex. Local Space specialises in providing temporary housing in the East London area, supported by guarantees from Newham, Hackney and Waltham Forest Councils. It also provides key worker accommodation. Due to the unique arrangements, it has some of the top operating margins in the sector and ranks in the top quartile of housing associations in terms of financial performance.
The credit rating report states “the stable outlook reflects our (S&P) expectation that Local Space will continue to benefit from revenue growth through long-term leasing agreements, mitigating higher leverage induced by its development plan over the next three years (2018-2020), while at the same time maintaining strong liquidity coverage.”
Jitinder Takhar, Local Space’s Chief Executive, said:
“We are very proud to have continued to hold our position in receiving this top recognition from S&P. We are a unique housing association operating in a particular market. Understanding our clients’ needs, meeting those requirements well and our partnering approach has resulted in a sector leading financial performance. Our success in showing continued financial strength demonstrates that value creation is possible in smaller organisations.”
Richard Reynolds, Local Space Chair said:
“Local Space has a sound business model and robust partnership arrangements. We are pleased to have our AA- credit rating reaffirmed by S&P. The credit rating will continue to enable Local Space to obtain funding from the capital markets at competitive rates and build on the success of our growth programme”.
Sir Robin Wales, Mayor of Newham, said:
“We helped establish Local Space in 2006 to provide homeless families with a home – I am very proud that since then thousands of families have benefited from this vision. The reaffirmation of the top credit rating demonstrates that the Local Space model is working, and this is why we welcome the Growth Strategy which will see the expansion of Local Space by a further 800 properties. By working together, solid foundations have been established, on which Local Space can continue to build.”