Elgin-based developer Springfield Properties has paid £49m for Redrow’s Scottish business, which was put up for sale earlier this year.
As part of the deal, Springfield will take over the Scottish head office of Redrow, paying £5m on completion and £44m in deferred payments over the next three years as developments are sold.
The loss-making business has eight ongoing developments in Scotland and was brought to the market in April, after Redrow, which is headed by Steve Morgan (pictured), decided to concentrate its efforts on London and south-east England.
Following the deal, Springfield will consist of a house-building business with 30 sites across Scotland and a development pipeline of around 500 new homes a year.
It said the acquisition would be a platform for Springfield’s strategy of becoming a £100m a year turnover within the next five years. It said it would “work out” Redrow’s eight existing sites in Scotland at Anniesland, Braehead, Dalkeith, Dunfermline, Inverkip, Kilwinning, Lenzie, and Motherwell, which have the potential for over 800 new homes.
The company had already begun its expansion into the central belt prior to the Redrow move, buying sites in Fife, West Lothian, Edinburgh, Perthshire and Aberdeenshire and an office base in Stirling.
It is anticipated that Springfield will establish its Central Scotland operation at Redrow’s Larbert office while retaining its Elgin office as the company headquarters.
Sandy Adam, chairman of Springfield Properties, said: “Over the last few years, we have been able to carefully manage our business and steer it through the difficult economic situation with the aim of expanding operations throughout Scotland when market conditions were right.
“Last year we began that process by assembling new sites and strengthening our senior management team. Prior to this deal we have added 1500 development sites to our portfolio in 2011 and post the deal we’re still in the market for land and sites.
“When Redrow announced its intention to sell its Scottish business, we saw a major opportunity to consolidate this growth. This deal is an exciting for Springfield, giving us great new locations and the platform to provide our quality homes for customers throughout Scotland. Redrow’s focus on design and craftsmanship sits well with our own emphasis on delivering quality and value.”
Have you booked your delegate place for RESI 2011 yet? Taking place at the Celtic Manor, Newport, 15-16 September 2011, RESI 2011 is the event to attend for the residential market. Can you afford not to be there? Visit www.resievent.com/property for more information and to book your place.
02 November 2012
23 February 2012