Vistry Group Plc has unveiled a strategic move to concentrate exclusively on building homes for affordable housing providers and rental landlords.
This move comes amid slowing private sales due to elevated borrowing costs. The homebuilder plans to merge its private homebuilding operations with its partnerships business.
The latter has seen significant expansion since the acquisition of Countryside in November 2022. Vistry aims to return up to £1bn in surplus capital to shareholders, a move enabled by the strategic shift. This will also entail reducing the number of its regional offices and cutting staff, as outlined in a statement released on Monday.
Greg Fitzgerald, chief executive of Vistry, commented on the developments: “The integration of Countryside has progressed well in the first half, firmly establishing Vistry as the leading provider of affordable mixed tenure housing in the UK. Despite challenging macro-economic conditions, our Partnerships business continues to experience robust demand, showcasing its market resilience.”
He added: “The growing social need for affordable mixed tenure housing makes Vistry uniquely positioned as the leader in partnership housing. By focusing our operations entirely on partnerships, merging our housebuilding operations with our partnerships business, we aim for sustained growth and maximised long-term returns for our shareholders.”
Vistry’s new direction includes targeting a 40% return on capital employed (ROCE) and the distribution of £1bn to shareholders over the next three years. “Our core social purpose and vision focus on delivering on the acute social need for housing across the country and increasing the availability of affordable, sustainable homes. I look forward to capitalising on this unique and exciting opportunity for Vistry,” Fitzgerald said.
In recent times, Vistry’s partnerships unit has been constructing homes primarily for affordable housing providers and significant rental investors, often pre-selling the majority of the units.
Conversely, the company’s private homebuilding division has been increasingly bulk selling units to investors due to a slowdown in private sales, disposing of 1,172 properties in the past year.
