15th Mar 2022 14:30
(Alliance News) - Berkeley Group Holdings PLC said on Tuesday it has acquired National Grid PLC's 50% stake in a joint property venture.
The FTSE 100 listed Cobham, Surrey-based property developer acquired the remaining 50% stake in the St William Homes LLP joint-venture from the electricity and gas utility company for GBP412.5 million cash.
The deal was funded from Berkeley's cash reserves.
St William Homes was previously a joint venture, first announced back in 2014, to develop residential and mixed-use properties in London and the South East from the National Grid's former gasworks sites. It is now a wholly-owned subsidiary of Berkeley.
"As these sites are now largely transitioned, it is the natural time for National Grid to crystalise its investment, whilst allowing Berkeley Group to focus on the delivery of these sites," explained National Grid.
Shares in National Grid were up 1.5% to 1,140.00 pence each in London on Tuesday afternoon.
The acquisition will add over 20,000 future homes across 24 sites to Berkeley's pipeline, with the venture already having delivered 1,100 homes.
Berkeley has signed further sales agreements with National Grid to acquire additional sites for GBP270 million to complete by 2025. A deferred consideration to National Grid of GBP230 million will also be paid until 2031 for sites previously sold to the venture.
"This is a fantastic transaction for Berkeley and National Grid...The acquisition continues Berkeley's philosophy of investing at the right time in the cycle for the long-term, securing unrivalled land holdings in London and the South-East," said Berkeley Chief Executive Rob Perrins.
Berkeley shares were trading down 2.1% to 3,858.00 pence each in London on Tuesday afternoon.
"Through the transaction announced today, Berkeley has achieved its objective of securing at least GBP7.5 billion of estimated future gross margin in its land holdings well ahead of its 30 April 2025 target, with the gross margin percentage maintained at around 27%," Berkeley said.
By Elizabeth Winter; [email protected]
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