Kier JV with Homes England and Cross Keys Homes

7 June 2018

Kier Residential launches joint venture with Homes England and Cross Keys Homes

Kier, a leading property, residential, construction and services group, today announces that, on 6 June 2018, it established a joint venture (the "JV") with Homes England ("Homes England") and CKH Developments Limited ("Cross Keys Homes") to develop c.5,400 homes across the country over the next ten years.

The JV will develop housing with a mix of tenures and will enable Kier to accelerate the development of its residential land bank through a capital efficient model. The establishment of the strategic partnership creates an opportunity for Kier to increase the scale of its mixed tenure house building activities by c.500 units per annum by 2020.

The economic ownership of the JV is Kier - 69%, Homes England - 26% and Cross Keys Homes - 5%, with Kier holding 50% of the voting rights. Kier will receive £27m in respect of its initial contribution of four development sites, which will be financed by a loan to the JV from Homes England. The JV partners will contribute £47m of equity funding in proportion to their economic ownership. The terms are currently being agreed with third party lenders to provide up to £80m of additional investment for the future development of new schemes by the JV.

Commenting on the announcement Haydn Mursell, Chief Executive of Kier, said: "This joint venture is an important milestone, bringing Homes England, Cross Keys Homes and Kier together in a new strategic partnership which will help address the national housing deficit. As joint venture partners, we have a shared ambition to work collaboratively to build more affordable homes across the country." 

Nick Walkley, Chief Executive for Homes England, commented: "At Homes England, we're using our finance, land and expertise to build more homes in areas of greatest need. Our innovative deal with Kier and Cross Keys Homes shows how we intend to form new commercial partnerships to increase housing supply, address affordability issues and generate value for the public purse."

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About Kier Residential

Kier has over 70 years of experience in the residential sector. Kier Residential offers a UK-wide capability to build a broad spectrum of residential housing whether for private sale on our own land, mixed tenure or contract building for a client. Specialising in a range of tenures, it constructs and maintains buildings for open-market sale, private rental, affordable rent and shared ownership. Kier develops more than 2,200 units of both private and affordable housing schemes per annum, with expertise running through the whole development process from land assembly and funding through to aftercare.

About Homes England

Homes England brings together land, money, expertise, and planning and compulsory purchase powers, with a clear remit to facilitate delivery of sufficient new homes, where they are most needed, to deliver a sustained improvement in affordability. Homes England is an executive non-departmental public body, sponsored by the Ministry of Housing, Communities & Local Government. 

About Cross Keys Homes

Cross Keys Homes is a Housing Association and residential builder based in Peterborough. It was established as a not-for-profit organisation in 2003. It now manages over 11,000 properties and houses around 14% of the city's population. In order to tackle the housing shortage Cross Keys Homes is committed to building more affordable homes. Cross Keys Homes provides homes through social housing, shared ownership, private rent and leasehold and has plans to expand into new geographic areas. For further information on Cross Keys Homes see www.crosskeyshomes.co.uk  

Cautionary statement

This announcement does not constitute an offer of securities by Kier Group plc (the "Company"). Nothing in this announcement is intended to be, or intended to be construed as, a profit forecast or a guide as to the performance, financial or otherwise, of the Company or any of its subsidiaries (together, the "Group") whether in the current or any future financial year. This announcement may include statements that are, or may be deemed to be, ''forward-looking statements''. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's or the Group's ability to control or predict. Forward-looking statements are not guarantees of future performance. You are advised to read the section headed ''Principal risks and uncertainties'' in the Company's Annual Report and Accounts for the year ended 30 June 2017 for a further discussion of the factors that could affect the Company's or the Group's future performance and the industry in which it operates.  Other than in accordance with its legal or regulatory obligations, the Company does not accept any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.