In a joint venture (JV) which aims to deliver thousands of new homes across England, Japanese homebuilder Sekisui House has formed a partnership with Urban Splash, a real estate regeneration company based in Manchester.
The JV comprises a total new investment of £55m by Sekisui House into Urban Splash’s ‘House’ development business – an innovative range of modular build homes– providing a significant boost to the UK’s modular housing industry, as well as helping to accelerate the production of much-needed new homes.
Sekisui House has invested £22m of new equity, with £30m of equity and debt funding coming from the UK government’s Home Building Fund, administered through the new housing delivery organisation Homes England.
Founded in 1960, Sekisui House is one of the world’s largest homebuilders and an international diversified developer, with cumulative sales of over 2 million homes. The company has over 20,000 employees and is listed on the Tokyo Stock Exchange and Nagoya Stock Exchange. In 2009, it expanded into several new international markets and now operates in China, Singapore, Australia and the US.
Advising Urban Splash on its multi-million-pound JV with Sekisui House was Eversheds Sutherland. Leading the global top 40 law practice team was corporate partner Alistair Cree, supported by a 35-strong cross-practice team, including real estate partner Daniel Walsh, legal director Jamie Partridge, corporate principal associate Lizzy Tindall, corporate senior associates Annika Unsworth and Russell Naglis, banking associate Thomas Donohoe and commercial associate Misha Sealy.
“Eversheds Sutherland has advised us for a number of years and continues to provide us with the same high level of technical and service excellence that we have now come to expect,” says Tom Bloxham, chairman of Urban Splash. “This was a significant, transformational deal for us, and one that we entrusted to the Eversheds team to deliver. We are delighted with the result and look forward to working with them in the future.”
Equally enthused with the deal is Yoshihiro Nakai, president and representative director of Sekisui House. “We are extremely pleased to be able to work together with Urban Splash to establish our operations and help to create outstanding communities in the UK,” he says. “Using modern methods of construction to build high-quality homes with short build times is one of our company’s great strengths. These operations can also help bring vitality to UK regions, and we will work to make the strongest connections with the local communities.”
In the view of Mr Cree, the key highlight of the transaction was the vindication it afforded the ‘House’ concept developed by Mr Bloxham and the Urban Splash team. “As you would expect, Sekisui wanted to be absolutely sure of their ground before they made their first foray into the UK market,” says Mr Cree. “Urban Splash has the brand and the credentials, and is one of the most innovative and forward thinking developers in the country. Sekisui House have bought into this and partnered. In helping to fund the JV, through both debt and equity, Homes England has facilitated the building of thousands of new homes at a time of acute housing shortage.”
No deal comes without challenges, of course, and the Urban Splash/Sekisui House transaction process was no exception. “Time differences meant quite a few late night and early morning telephone calls, but in truth the biggest challenge was making sure that at all stages of the transaction each party felt comfortable and understood the obligations it was signing up to,” says Mr Cree. “Maintaining communication between parties – both via the lawyers and client to client – was key.”
Ultimately, the Urban Splash/Sekisui House JV is a major transaction for the UK house building industry – a deal providing confidence to other investors seeking similar opportunities in the UK.
“We are thrilled to have supported Urban Splash in what is a significant chapter in their growth story,” concludes Mr Cree. “The company now has the potential and backing to really attack the traditional players in the sector. Houses need to be built quickly and more innovatively, with design flourish and flair – this is what Urban Splash is made for and many thousands of people will benefit as a result.”
Keywords: Real estate