UK House Market News:- Japan’s biggest house builder and prefab pioneer, Sekisui House, has struck a £90m deal with developer Urban Splash and government agency Homes England.
Real estate and financial advisor JLL facilitated the deal which includes a £55m investment into Urban Splash’s modular ‘House‘ concept.
Sekisui House president and representative director Yoshihiro Nakai, said he was pleased to be establishing operations in the UK.
“Using modern methods of construction to build high-quality homes with short build times is one of our company’s great strengths. Our technology and know-how can help resolve pressing social issues in the UK, and I want to see us play our part immediately. These operations can also help bring vitality to UK regions, and we will work to make the strongest connections with the local communities.”
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Sekisui House has invested £22m of new equity, with £30m of equity and debt funding coming from the Government’s home building fund, administered through Homes England. Entrepreneur, Noel McKee, founder of We Buy Any Car, has also made a £2.5m equity investment in the new partnership and will take an incremental 5 percent stake.
Homes England chair, Sir Edward Lister, said: “When Homes England launched last year we said we’d disrupt the housing market to increase the pace of construction. By helping bring one of the world’s largest and most innovative house builders to UK shores, we’re putting our money where our mouth is.
“By creating a more diverse landscape – where smaller builders such as Urban Splash get a stronger foothold – we’re rebuilding the building industry; driving up quality and improving consumer choice.”
Sekisui picked for green credentials
Urban Splash chairman, Tom Bloxham, said the deal was an opportunity for the UK house building industry.
“We hope to leverage our 25 years of place-making experience and our recent investments into modular housing by bringing in new partners; having looked far and wide we chose Sekisui House from Japan because of the company’s unrivalled global experience in modular construction and shared values and philosophy that we are making homes not units, and a joint belief in the need for a green future.”
Bloxham said the company was proud to partner with Homes England because of its commitment to modular construction and the desire to grow capacity in the UK housing business.
“We are incredibly excited about the accelerated production of much-needed homes and evolving traditional practices as we embrace the benefits of innovative offsite construction. I hope it will establish us as the housing partner of choice for landowners – both public and private,” he said.
Sekisui House is at the forefront of modern methods of construction, where homes are built in factories and then shipped out to sites.
Property finance brokers Hank Zarihs Associates said mainstream banks had been traditionally cautious about lending to developments using off-site construction. But he added this new initiative was a positive one and would make it easier for developers using such methods to gain construction loans and property development funding.