London Square has created a new business dedicated to build-to-rent called London Square Living.
The brand will support forward funding opportunities at London Square schemes, as the company expands following a drop in market sales.
In company results for the year ended March 2021, filed at the end of July, London Square said it was focused on delivering housing across all tenures through three business lines: London Square Partners, which works with the public sector, London Square Living and Square Roots, its affordable housing business.
London Square will continue to focus on direct sales as the core focus of the business, but added: “We recognise there are incremental opportunities in London’s build-to-rent and affordable housing markets.”
Over the next five years, the developer aims to unlock new capital to forward fund more sites. The company said: “We will continue to build our track record in the high-growth build-to-rent segment, working with institutional investors to facilitate their capital deployment strategy.”
London Square has previously sold completed BTR stock to Delph Property’s Kooky platform. More recently, it joined forces with BTR operator and developer Moda Living to purchase the final Royal Mail sites in Nine Elms. However, the business has never commented on this venture.
In the company results, London Square noted that “the sales market activity is uncertain”. For this reason the business is focusing on longer term development revenues.
During the 2021 year, revenue hit £158.7m, a drop of 41.7% on 2020, with a pre-tax profit of £9m, up from £75,000 a year earlier. At the end of the financial year London Square had secured £195.4m in forward sales, up 3.4% on last year. It has also contracted £115m for the next financial year.
Affordable housing made up 52.4% of forward sales in 2020-21. This increase in forward funding saw the gross margin dip from 20.4% to 18.3%.
During the year, London Square invested £121.1m in development projects, an increase of 4.5% on the previous year. The developer exchanged on four sites, resulting in a land bank of 3,543 homes, up 50% year on year. It said this was valued at £1.7bn. Since the year end, it has added two further sites with 250 homes.
At the end of the year, London Square increased its investment in London Square Developments (Ventures) by £73.4m.
Chief executive Adam Lawrence (pictured) said: “We are realising our strategic ambition to create a unique platform to control an entire new eco-system of tenures and enabling us to deliver the numbers of affordable, private sale and build-to-rent homes required for people who want to work and live in London.
“Every prospective new site is now viewed through three lens for its potential – private for sale, affordable or build to rent – or a mix of all three tenures.”
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