The Joint Venture will pay Quintain £22.7m for the unserviced 2.5 acre plot and a further £9.5m for future associated infrastructure: a total of £32.2m. In its respective roles as a 50% partner and the land vendor, Quintain will therefore own 50% of the equity in the Joint Venture and receive cash proceeds of £13.6m, paid around completion of the transaction, with a further £2.5m to be paid on completion of the first phase, anticipated in 2016.
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Seven buildings containing 475 homes will be built on the plot, arranged around an acre of private gardens. Two of the buildings, covering 93,000 sq ft and containing 143 homes, will be constructed for Quintain, for which the Company will pay the Joint Venture £37.1m. Of this amount, £5.6m will be paid in May 2014 with the balance paid from existing Company resources on practical completion, expected in 2016. These homes will be retained by Quintain and professionally managed as high quality private rental sector accommodation. This builds on the Company's existing lettings platform, established in 2008, which already successfully manages 150 properties on behalf of individual landlords and achieves average occupancy rates of 97%.
Quintain expects a new, strong income stream to be generated for the Group from this PRS business. In addition, Quintain's appointment as development and project manager for NW01
(CD/JP)
