Kier joint venture to deliver 5,000 new homes

The FTSE 250 company said the venture would develop housing with a mix of tenures, and would enable it to accelerate the development of its residential land bank through a capital efficient model.

It said the establishment of the strategic partnership created an opportunity for Kier to increase the scale of its mixed tenure house building activities by around 500 units per annum by 2020.

“This joint venture is an important milestone, bringing Homes England, Cross Keys Homes and Kier together in a new strategic partnership which will help address the national housing deficit,” said Kier chief executive Haydn Mursell.

“As joint venture partners, we have a shared ambition to work collaboratively to build more affordable homes across the country.”

The economic ownership of the joint venture is Kier at 69%, Homes England at 26% and Cross Keys Homes at 5%, with Kier holding 50% of the voting rights.

Kier would receive £27m in respect of its initial contribution of four development sites, which would be financed by a loan to the joint venture from Homes England.

The partners would contribute £47m of equity funding in proportion to their economic ownership.

Kier said the terms were currently being agreed with third party lenders to provide up to £80m of additional investment for the future development of new schemes by the venture.

“At Homes England, we're using our finance, land and expertise to build more homes in areas of greatest need,” said Homes England chief executive Nick Walkley.

“Our innovative deal with Kier and Cross Keys Homes shows how we intend to form new commercial partnerships to increase housing supply, address affordability issues and generate value for the public purse.”