Berkeley snaps up National Grid’s stake in joint venture for over £400m
Property developer Berkeley has acquired the National Grid’s stake in a realty joint venture for £412.5m.
The London-listed house builder snapped up the remaining 50 per cent interest in its St William Homes joint venture, it announced on Tuesday.
Rob Perrins, Berkeley’s chief executive said: “The vision of our innovative partnership was to take National Grid’s redundant gasholder sites and stitch them back into their local communities; transforming them into well-connected, nature rich, beautiful places with low carbon homes and new amenities.”
Now was the perfect time for the acquisition as there are now 24 sites in St William, Perrins added.
“The acquisition continues Berkeley’s philosophy of investing at the right time in the cycle for the long-term, securing unrivalled land holdings in London and the South-East,” he said.
Berkeley shares were down more than two per cent on Tuesday afternoon.
The developer said last week that it was on track to meet its performance targets despite a “volatile” trading environment with soaring costs and pressure on the company’s supply chain.
Berkeley said it expected forward sales to be above £1.7bn when it posted full year results, while net cash was forecast to be around £50m higher than the figure the firm reported at its half-year update in October.
Through the acquisition, Berkeley will gain full control of 19 sites already in its land holdings, two sites already in its near-term pipeline and three new long-term sites.
This represents more than 20,000 future homes across 24 sites in total.
The transaction will continue to support some 28,000 UK jobs directly and indirectly through the developer’s supply chain, bosses said on Tuesday.
In a note to investors, Investec described the acquisition as “a sensible and well-timed deal.”
The note said “risks around price paid and expected volume and profit delivery should be mitigated by the fact that the group knows the business well and has owned 50 per cent of the JV since it was established in 2014.”