Housebuilder continues shift to partnerships-focused model

Vistry has signed a £819m deal to build thousands of homes for rent. 

Under the agreement, Leaf Living and Sage Homes will forward buy 2,915 units from the housebuilder on plots across 70 developments. 

Delivery will begin this year, with most homes set to be completed within the next two years. 


The focus on partnerships housing came after a review of strategy in the wake of Vistry’s £1.1bn merger with Countryside last year

Leaf will receive 1,522 home for the private rented sectors, while 1,393 affordable homes for rent and shared ownership will be delivered to Sage. 

The pair are both backed by Blackstone-managed funds and Regis Group. 

Delivery of the initial tranche of affordable properties will be enabled by Homes England grant funding. 

The structure of the deal means Vistry will receive a payment of £160m this year, with further staged payments across the development programme.  

“The portfolio is expected to deliver an adjusted operating margin in excess of 12% and a return on capital employed of c.40%, in line with the group’s medium term financial targets,” the firm said. 

Vistry chief executive Greg Fitzgerald said: “We have an excellent track record of working in partnership with Leaf and Sage to deliver new homes and I am extremely pleased to have reached agreement to grow these relationships through this exciting, market leading opportunity.” 

The move comes after the announcement in September that Vistry would shift to focus entirely on partnerships housing, merging its 8,700-home traditional housebuilding business with the partnership business previously known as Countryside Partnerships. 

Shares in the listed firm jumped immediately after it announced its shift in strategy. 

>>See also: Vistry to cut headcount by 200 in partnerships restructure

>>See also: Genius or folly? Why Countryside’s decision to get out of housebuilding is causing a stir

The firm said the new approach would involve pre-selling at least 50% of homes on its sites to partners such as housing association, build-to-rent investors, local authorities or later living providers. 

“Through our unique partnerships model, Vistry is maintaining the momentum of delivery of much needed affordable housing across the UK,” said Fitzgerald.   

“Our strategy gives the group significantly greater visibility on earnings than traditional housebuilders and this new partnership and others to follow, will help us drive towards our medium-term targets and the delivery of £1bn of shareholder distributions over the next three years.” 

Vistry said the agreement underpinned its previously stated expectations for a full-year pre-tax profit of £410m.