‘New beginning’ for Urban Splash after £77m sell-off
MANCHESTER property developer Urban Splash has sold most of its flagship schemes, including 654 apartments, to social housing landlord Places for People in a £77m deal.
The transaction is part of a major overhaul of the debt-laden company’s structure that will see it operate under a number of new debt free corporate entities and look for joint venture opportunities.
Co-founder Tom Bloxham described the move as a “new beginning” for the company which has been hamstrung by the depressed property market and debts of more than £200m.
The portfolio acquired by Places for People includes stock from Urban Splash schemes in Manchester, Plymouth, Bristol and Leeds, which have seen investment through the Homes and Communities Agency, including its Rent to Homebuy Scheme. It includes the Sylvia and Christabel blocks near Rochdale Road, Manchester; the Chips scheme in Ancoats; Longlands in Stalybridge; Saxton, Leeds; and Lister Mills in Bradford.
Mr Bloxham said: “This restructure, sale of the residential portfolio and setting up of a sales and management agreement with Places for People signals the start of a new beginning for us.
“It has been a tough five years but during that time we have delivered some great award winning projects including the Royal William Yard in Plymouth, Lakeshore in Bristol, Longlands in Stalybridge and Park Hill in Sheffield. We are pleased that we have now been able to undertake a corporate restructure and place individual properties and relevant debt into new legal entities.
“Over the last 20 years, we are very proud of our track record for transformation, which has been recognised with 342 awards. We hope that this restructure will allow us to continue helping to regenerate the UK.”
Accounts for the year to March 2012 showed net debt levels rose £8m to £242.4m. The group owed HSBC £90.6m and has a £113.6m syndicated loan facility repayable on demand. It is using the revenue from the deal to pay down some of the debt but has also set up a new holding company, Urban Splash Holdings Limited, a new management company; Urban Splash Management Limited and a number of new asset holding subsidiaries. It said the new management company and a number of the asset holding companies will be free of bank debt and will be used to take on new projects.
Under the Places for People deal Urban Splash will provide sales and management services for three years. Places for People’s chief executive David Cowans said: “Places for People has invested in acquiring these properties from Urban Splash as part of our continued commitment to high quality, affordable and sustainable housing. Adding these properties to our portfolio enables us to provide even greater choice and more access to homes for sale, rent and part ownership across the UK.”
Places for People is headquarted in London but has one of its main corporate offices in Preston. It manages assets worth £3bn.
Deloitte and Eversheds advised on the deal.