Deal with Citra Living comes as housebuilders ramp up bulk sales in ‘challenging’ market
Housebuilder Barratt has agreed a deal with the housing arm of Lloyds Bank to sell 604 homes for rent for £168m.
The deal with Citra Living, a wholly owned subsidiary of Lloyds, is part of a 2021 strategic partnership Barratt formed with Lloyds, under which it said the pair would work to deliver 1,000 homes per year for the rental market. It has previously agreed the sale of some 502 homes on individual sites to Citra.
The UK’s largest housebuilder said 500 of the homes – which are situated across multiple sites – will be transferred on completion to Citra in the financial year to June 24, with the remainder in the following year.
David Thomas, chief executive of Barratt, said he was “delighted” by the deal. “Our focus on quality and the environmental performance of our homes has enabled us to assemble an attractive portfolio of homes in desirable locations for private rental,” he said.
“The single-family dwelling segment of the private rental sector continues to grow strongly and presents an opportunity for us to both diversify our revenues against the current challenging market backdrop and develop communities which encompass all forms of housing tenure.”
Andy Hutchinson, managing director of Citra Living, said the partnership with Barratt will contribute to delivering “much needed housing stock across the UK.”
The current balance sheet value of the 604 homes is just £72.4m. Barratt cautioned that the sale of 195 of the homes in the portfolio, worth £21.5m and situated across four separate sites, was conditional on further due diligence by Citra.
The deal came as first-time buyer house builder Gleeson also announced a similar forward-purchase agreement with investors Carlyle and Gatehouse Investment Management. Gleeson said it had agreed a £50.4m deal to sell 288 homes across multiple developments to the pair for single family rental, of which up to 66 homes will complete in the current financial year ending June 2023, with the rest in the following year.
Both deals come as housebuilders look to secure bulk buyers for stock to make up for falling demand from owner occupiers, given higher mortgage rates.
Graham Prothero, chief executive officer, said: “This transaction represents a compelling opportunity in the context of the current uncertain market environment and we are delighted to be working with partners of the calibre of Carlyle and Gatehouse, who value the quality of our product and the communities which we create.”
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