Redland, the sleepy Surrey-based building materials group, has stumbled on a profitable venture in the United States. In January 1983 Redland bought for £50m an 80% stake in Boston Industries Corporation, since renamed Redland Worth; subsequent share purchases have pushed Redland’s holding to 87.5%.
The principal activity of Redland Worth is operating a large limestone quarry on the outskirts of San Antonio. To meet increased demands for its products a new plant was ordered and for operational reasons this was sited close to the quarry face, leaving a great deal of land available for redevelopment.
Redland has now formed a partnership — known as the La Cantera Partnership — with USAA, a Texas-based insurance company, to carry out a major residential, commercial and hotel development on the land, which has frontages to major state highways.
With land bought recently by USAA, some 800 acres are available for development. Part of the 700 acres originally owned by Redland Worth and valued at $41m (£29.3m) has been sold to the partnership at its agreed value of $23.2m (£16.6m) to be paid in five equal annual instalments.
The partnership will be 49.3% owned by Redland, 34.5% by USAA, while Bill Worth, whose family originally owned Boston Industries, will hold 16.2%.
The development will be managed by Trammell Crow and funds for the first phase of infrastructure will be raised from local Texas institutions. There is no obligation on the partners to provide any further capital or funds in any other way to the partnership. Thus Redland has a near 50% stake in a major development in one of the fastest-growing towns in Texas while still retaining its profitable limestone quarrying business.
