Bovis will build approximately 510 homes on sites it already owns, pre-sold to these investment groups. Roughly half of them will be built this year, and the other half in 2015.
One of customers is accessing funding through the government's Build to Rent Scheme.
These sales will be in addition to Bovis Homes’s own private sales activity, accelerating the development on each of the sites included without sales risk and at a profit margin in line with its anticipated group operating margin for 2014 and 2015.
The first investor wants approximately 190 homes in the south of England. In this transaction, Bovis Homes will partner with the investor and put in £1m of its own for a 27% equity stake in the investing entity and will also advance £4m as a secured loan.
The second transaction involves the delivery of 320 new homes on sites mainly in the midlands and north, enabling Bovis to accelerate trading through some of its older sites, some of which have been written down.
Bovis said that it now aims to deliver between 3,650 and 3,850 legal completions in 2014. The board now expects its return on capital employed to increase to 15% in 2014 (2013: 10.4%).
Chief executive David Ritchie said: “We are delighted to have agreed these two private rental sector deals which will provide the opportunity to deliver over 500 additional new homes during 2014 and 2015. Through achieving this, Bovis Homes is accelerating delivery across a number of its existing housing sites and enhancing shareholder returns.”
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