Housebuilder Redrow has sold its Scottish operation to Elgin-based firm Springfield Securities for £49m.
The deal consists of £5m cash upfront and £44m to be paid as developments are sold over the next three years.
Redrow’s operation in Scotland consists of eight sites with planning permission. The net book value of the assets is £49m. In the year ended 30 June 2010, Redrow’s operation in Scotland generated turnover of £31m and a loss before tax of £1.7m.
The proceeds of the disposal will be used by Redrow to increase investment in land in its other operations, particularly London and the South East.
Springfield said the deal would give it the opportunity to grow “from its current position to a company with a £100m-a-year turnover within the next five years”.
Springfield has already started to expand across the central belt. The Redrow deal will give it a total of 30 sites across Scotland and the ability to build about 500 new homes per year.
Sandy Adam, chairman of Springfield Properties, said: “Last year we began that process by assembling new sites and strengthening our senior management team. Prior to this deal we have added 1,500 development sites to our portfolio in 2011 and post the deal we’re still in the market for land and sites.
He added: “When Redrow announced its intention to sell its Scottish business, we saw a major opportunity to consolidate this growth.”
james.a.kenny@estatesgazette.com
