Housebuilder secures £75m loan to support building of 13,000 homes
St Modwen has agreed a £75m loan from Homes England to support the building of more than 13,000 homes.
The agreement was confirmed in the Budget by Chancellor Philip Hammond.
The money is being provided by the Homes England home building fund and is will fund infrastructure works.
Nick Walkley, chief executive of Homes England, said: “This long-term deal shows how Homes England is stepping in to disrupt the housing market and make homes happen.
“By equipping ambitious partners with the resources needed to accelerate construction, we’re breaking new ground – making homes possible and helping to improve neighbourhoods and grow communities.”
The Longbridge-based developer will accelerate the delivery of homes and serviced land across its portfolio, and the loan sits alongside the £475m refinancing to the unsecured revolving credit facility the developer announced last December.
Rob Hudson, chief financial officer at St Modwen, said: “This financing further strengthens our resources whilst reinforcing a key relationship with Homes England, with whom our strategic objective to grow our residential and housebuilding business is strongly aligned.”
St Modwen, a FTSE-250 company, has committed to grow its residential and housebuilding business as one of four pillars to its strategy, which has also seen the company sell off retail assets.
It has two approaches to residential projects. It brings forward land from its existing residential land bank to produce “oven-ready” land that can be sold to third parties. Last year, over 2,200 units of oven-ready land were either transferred to St Modwen Homes or sold in the open market, with a total value of £137m.
It also takes the whole development forward via our housebuilding brand St Modwen Homes, or in joint venture with like-minded developers. It is forecasting that sales volumes from its St Modwen Homes business will increase by “up to 25%” this year.