Vistry has signed a “substantial” partnership agreement with Leaf Living and Sage Homes.
The buyers, both of which are backed by Blackstone-managed funds and Regis Group, will buy 2,915 homes from Vistry, with a GDV of £819m.
The homes are on plots located across 70 of Vistry’s developments, with delivery to commence this year and the majority of homes completed within the next two years.
The plots formed part of the group’s former housebuilding landbank and are being pre-sold in line with Vistry’s strategy of pre-selling around 65% of all units across the business.
The deal is being hailed by Vistry as “significant progress” with its strategy to merge its housebuilding operations into its partnerships business.
The transaction comprises 1,522 homes for the private rented sector being delivered to Leaf and 1,393 affordable homes for rent and shared ownership being delivered to Sage.
Vistry and Sage will use their existing Homes England grant funding, under the Affordable Homes Programme, to deliver an initial tranche of both rented and shared-ownership affordable homes.
Vistry expects an initial cash receipt of around £160m in FY23, with further staged payments across the development programme. The portfolio is expected to deliver an adjusted operating margin in excess of 12% and a return on capital employed of around 40%.
As a result, Vistry said it was confident it would reach its profit expectation of £410m for 2023, with year end net debt around £100m.
Vistry chief executive Greg Fitzgerald said: “We have an excellent track record of working in partnership with Leaf and Sage to deliver new homes and I am extremely pleased to have reached agreement to grow these relationships through this exciting, market-leading opportunity.
“Through our unique partnerships model, Vistry is maintaining the momentum of delivery of much needed affordable housing across the UK. Our strategy gives the group significantly greater visibility on earnings than traditional housebuilders and this new partnership and others to follow, will help us drive towards our medium-term targets and the delivery of £1bn of shareholder distributions over the next three years.”
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