Housebuilders this week warned against potential conflicts of interest after Laing O’Rourke signalled its entry into the sector with the purchase of a site in Kent
One housebuilder said that it could, for instance, lead to O’Rourke in its role as a housebuilder competing for the same sites as other housebuilders that were also clients of O’Rourke as a contractor.
O’Rourke, which is based in Dartford in Kent, is understood to be in talks to buy a site in North Fleet, Kent, from Kier Group. Kier chief executive John Dodds is thought to have said that the deal was imminent during a presentation to analysts last week.
It is thought that the site could accommodate about 450 flats with a selling price of between £120,000 and £160,000. A spokesperson for Kier confirmed that it was “in negotiations with a potential purchaser” on the site, but would not comment on any O’Rourke involvement.
O’Rourke announced the opening of the housing arm Explore Living two weeks ago, and since then has approached several housebuilders to buy sites or enter into joint ventures in order to build up its land bank.
Alan Cherry, chairman of housebuilder Countryside Properties, said this week: “They work with us as contractors and will have to watch out for conflicts of interests if we are competing for the same sites. We are clients of theirs and you become close and share ideas.”
Another leading housebuilder also had a warning for O’Rourke. He said: “Housebuilding is very different from contracting, as several contractors have found in the past when they entered the market when times were good only to retreat when they became tough.
Laing O’Rourke will have to be careful not to damage current relationships with housebuilders
“A massive cash commitment is needed even for a relatively small operation – very significantly more than in contracting. Laing O’Rourke will also have to be careful not to damage current relationships with housebuilders, but I would imagine they have taken that into account.”
However, Philip Davies, chief executive of Linden Homes, said O’Rourke had proved itself in construction and was well placed to capitalise on volume housebuilding in the Thames Gateway.
- Deputy prime minister John Prescott has told planners at the East of England Regional Assembly that they will have to allow for 29,000 more houses than the 478,000 proposed last year in draft government plans. The move comes after EERA rejected first an extra 18,000 houses and then threw out the government’s plans entirely because of concerns about infrastructure.