24th Mar 2014 09:51
LONDON (Alliance News) - Housebuilder Bovis Homes Group PLC Monday said it has signed contracts with two separate investors to sell new-build properties under two private rental sector transactions across a range of sites it already owns.
Bovis did not name the investors but said the homes will contribute around GBP80 million in revenue.
Last month, the company said it was in negotiations for two private rental sector transactions for around 500 homes, one of which is accessing funding through the UK government's Build to Rent Scheme, which aims to supports the development of new purpose-built privately rented homes.
Bovis on Monday said the first part of its deal is for around 190 homes in the South of England. It said the homes are on large sites where it may have considered selling land phases to "enhance capital turn" and where the private rental sector transaction delivers stronger returns.
For this transaction, the company will partner with an investor and invest around GBP1 million for around a 27% equity stake in the investing entity. It also will advance GBP4 million as a secure loan.
The second deal is for around 320 new homes on sites mainly in the Midlands and the North of England, which Bovis said will enable it to accelerate trading through some of its older sites - some of which have been written down.
Bovis said its strong private sales position, combined with the additional volumes arising from the private rental sector transactions should allow it to deliver a strong increase in total reservations during 2014.
It now aims to deliver around 3,650 and 3,850 legal completions in 2014, including around 250 private rental sector homes.
"With a clear focus on controlling the capital employed of the group, capital turn is now expected to increase to around 0.9 in 2014," it said.
As a result, return on capital employed is expected to increase to around 15% in 2014 compared with 10.4% in 2013 with further progress anticipated thereafter.
The stock was trading at 859.15 pence, down 5.35 pence or 0.6%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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