Construction schemes worth £483m for regeneration and property development firm

Urban regeneration and property development company Muse Developments, which has a base in Leeds, has contributed to half year results released today by listed parent company Morgan Sindall Group.

So far this year, Muse has made progress on 36 regeneration schemes across the UK, including key developments in Yorkshire. Muse currently has 15 projects on site, with a total construction value of £483m, and is expecting to place a further £825m of construction contracts in 2020.

And partnership housing specialist Lovell, which has its Eastern regional office in Leeds, has also contributed positively to its parent company’s results.

Muse’s order book and forward development pipeline now stands at £2.2bn, with the business being selected as preferred developer on a further three projects this year with a total gross development value of £350m.

Muse’s biggest projects in Yorkshire include the flagship 1.4m sq ft industrial and distribution development, Logic Leeds. A major deal was agreed with Aberdeen Standard Investments at the scheme to forward-fund the development of a 361,000 sq ft distribution unit with a pre-let agreed to a high profile global occupier.

A 362,000 sq ft unit was also recently handed over by Muse to electronics giant Premier Farnell for its new state-of-the-art distribution centre.

Muse is Rotherham Borough Council’s development partner for the Forge Island regeneration programme. The proposal includes a cinema, food and drinks outlets and a hotel set within an attractive public space and a pedestrian bridge connecting to the rest of the town centre.

And all properties are now sold at the second phase of The Gables, a Muse development of 43 new homes in Doncaster town centre.

Morgan Sindall Group has delivered strong profit growth in the first half of this year with adjusted operating profit up 18% to £37.5m (HY 2018: £31.9m) on revenue of £1,421m (HY 2018: £1,423m).

The Group reports a secured order book of £4.2bn, up 19% from the year end, with the regeneration and development pipeline now £3.3bn, up 6% from the year end position. With adjusted earnings per share up 15% for the period to 64.2p (HY 2018: 55.6p), and interim dividend up 11% to 21.0p (HY 2018: 19.0p), the Group says it is confident of a strong performance for the second half of 2019.

Matt Crompton, Managing Director at Muse, said: “The first half of 2019 has been positive, with significant progress on many of our key regeneration schemes across the UK. We continue to work closely with our partners to create exceptional new places, creating real value for local authorities, occupiers and communities.

“There’s much work still to do, but we’re well-positioned for our full year expectations, as construction progresses well on a number of projects and residential sales continue positively across the country.”

Nationally, Lovell has seen a 40% increase in operating profit compared to the same period in 2018.  The company has increased investment across the country as the business embarks on a period of growth and this has resulted in a combined national forward order book and regeneration and development pipeline of £1.1bn.

Lovell has built more than 121 homes across Yorkshire, Lincolnshire, Derbyshire and Rutland so far this year and has a forward order book and regeneration and development pipeline now at £106m for these counties.

Lovell’s Regional Managing Director, Robert Adams, said: “Our focus for the second half of the year is driving strategic growth in the business.

“Our ability to offer such a comprehensive range of solutions in unlocking land has led to our involvement in some of the UK’s most important homes schemes.

“We’re excited to deliver urgently-needed high-quality homes across all tenures and look forward to completing work on an estimated total of 220 homes this year.”

The firm’s Eastern region is currently working on key projects in Lincolnshire, Derbyshire, Yorkshire and Rutland including phase 2c of a multi-million project called The Leeway, in Hull. It is a major regeneration scheme to provide nearly 800 new homes in the Ings area of the city.

This £17.5m phase will deliver 108 homes for open market sale for sister company Compendium Living and affordable homes for Together Housing. Phase 2b, providing 140 new homes is due to start later in 2020.

Lovell is also working on Doncaster Lakeside – a £30m, 147-home development, which includes five affordable homes.