L&Q sells strategic land business to Urban & Civic

L&Q has confirmed that it will soon complete the sale of L&Q Estates to developer Urban & Civic.

The strategic land business, which is a wholly owned subsidiary of L&Q, promotes sites through the planning process, from the pre-allocation stage to securing implementable planning consents before delivering serviced land to the marketplace.

At the UKREIIF conference in May, Housing Today revealed that the housing association was exploring the sale of the subsidiary, as well as its private rental properties.

Speaking on a panel on the shortfall in supply of social housing, the chief executive of L&Q, Fiona Fletcher-Smith had said the housing association was in the process of completing a deal to sell its strategic land company, and had put its PRS portfolio up for sale.

>> See also: L&Q reports trebling of surplus – but this could be reduced by impairment charges

>> See also: L&Q appoints former Co-op Bank boss as group chair

Fletcher-Smith said at the time that L&Q was “putting our own house in order”, adding that L&Q Estates and its PRS portfolio are not “core”. She said “they’re commercial activities that we bolted on over the years that don’t make sense anymore.”

In a statement today, master developer Urban & Civic said it had been identified “as a logical purchaser to deliver L&Q Estate’s focus on boosting housing output across South East England and into the Midlands”.

The acquisition will see Urban & Civic expand its portfolio into Milton Keynes, whilst also widening its commitment to strategic interventions in other high-growth locations.

Urban & Civic noted that Catesby Estates, the developer’s land-promoting subsidiary, will benefit substantially from expansion into new target areas. They said the expansion will strengthen market competition by enabling Urban & Civic to progress sites that will be made directly available to housebuilders once planning consent is secured.

L&Q acquired L&Q Estates, formerly known as Gallagher Estates, in 2017 to unlock land for housing development on a regional basis.

Waqar Ahmed, executive group director of finance at L&Q, said: “We are pleased to have reached this agreement with Urban & Civic. We’re immensely proud that since acquiring L&Q Estates in 2017, we’ve enabled the delivery of over 11,300 new homes, of which 1,800 have been built by L&Q.

”However, our long-term strategy is focused on ensuring that every L&Q resident has a safe and decent home, and access to high quality services they can rely on. This deal will help us meet this goal by simplifying our business and generating additional revenue which will be reinvested into our existing homes and services.”

Waqar added: “L&Q remains committed to building the affordable homes the country so desperately needs, but this deal signals a longer-term ambition to concentrate future growth in our core areas of Greater London and Greater Manchester, rather than pursue strategic land opportunities across the wider South and Midlands.

”This will allow us to focus our resources on areas where housing need is the greatest, and where we are in the strongest position to provide responsive, local services that offer the best value for residents.”

Nigel Hugill, Urban & Civic’s chief executive, said: “We were delighted to be afforded the opportunity to acquire L&Q Estates, a business that we have admired since the inception of Urban & Civic and with which we are fully familiar.”

Hugill added that “it is simply infeasible” to meet housing targets in the south-east of England without greater use of strategic sites.

He continued: “The acquisition promises a step change for Urban & Civic and Catesby Estates as the new Government looks at immediate means by which housing numbers can be lifted.

”Collectively, the enlarged group has gathered a lot of learnings to create best practice in amenity and landscape led master development. I expect this knowledge and experience to prove invaluable in the changed political environment.”

“We can also help inject new competition into the housebuilding process by encouraging the participation of an otherwise apparently inexorably reducing number of SMEs across a broader range of projects. Seeing is believing but the acquisition will enable us to push harder again on new, amenity led, strategic housing development.”