Telford Homes sells London property for £63.2m

Residential property developer Telford Homes has exchanged contracts for the sale of 150 homes and commercial buildings that are being built on Carmen Street, London, to M&G Real Estate, for a net £63.2m.

Ahead of its preliminary results on Wednesday, the pre-construction deal was Telford's second transaction in the private rented sector (PRS) and also comprised the freehold interest of the properties. Its shares rose more than 2% on the news.

Telford, which is focused on non-prime London property, said the sale to M&G was on a forward-funded basis and would comprise an initial land payment followed by regular payments throughout the construction period.

The Carmen Street development has full planning permission to include a 22-storey tower and 206 new homes. The remaining 56 flats will be subsidised affordable homes and will be sold by Telford in a separate deal to a housing association. The development was anticipated to be completed in 2019.

Telford said it continued to explore further PRS opportunities and its two transactions to date were just the start of the potential for PRS to become a permanent and more significant part of the group's sales mix.

Directors were also exploring whether longer-term partnerships could be formed with institutional investors to enable further sales within a relatively fixed framework and to work together on future site acquisitions.