Bovis announces private rental developments
Housing developer Bovis Homes has revealed plans for new developments to be constructed for the private rental sector (PRS).Contracts have been signed with two separate investors, one of which is securing finance through the government's Build to Rent scheme.Properties are to be constructed on land already owned by Bovis Group.In total, 510 homes are to be built, with a total revenue of approximately £80 million. Around 250 properties will be delivered this year, with the remainder being constructed during 2015.The first transaction, for 190 homes, is focused on the south, where the private rental scheme is intended for sites where the company may have considered selling land phases to enhance capital turn. Stronger returns are expected as a result of the PRS deal. Bovis is to partner with the investor and invest approximately £1 million for a 27 per cent equity stake in the PRS investing entity. It will also advance £4 million as a secured loan.In the second transaction, the housing firm is to deliver around 320 new units on sites located mainly in the Midlands and the north.Bovis chief executive David Ritchie said: "We are delighted to have agreed these two private rental sector deals which will provide the opportunity to deliver over 500 additional new homes during 2014 and 2015. "Through achieving this, Bovis Homes is accelerating delivery across a number of its existing housing sites and enhancing shareholder returns."The firm says the additional volume of the PRS transactions should result in a strong increase in total reservations in 2014. It aims to deliver between 3,650 and 3,850 legal completions this year.In February, Bovis reported a 48 per cent rise in pre-tax profits, which reached £78.8 million. The average price of a Bovis property climbed 14 per cent to £195,100.It has also announced plans to almost double the size of its business over the next three years on the back of a strong housing market.
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