Vistry Share Price Rose 4.3% After Partnering With Sage and Leaf

The Vistry Group PLC (LON: VTY) share price rose 4.29% after announcing a significant milestone in its strategic plan to integrate its Housebuilding operations into its Partnerships business. The achievement comes as a substantial partnership agreement with Leaf Living and Sage Homes, both backed by Blackstone-managed funds and Regis Group plc.

Under the agreement, Leaf and Sage will acquire 2,915 housing units from the Group, with a gross development value of £819 million. These units are situated on plots spread across 70 of Vistry's developments. The construction will commence later this year, with most homes expected to be completed within the next two years.

The building plots were originally part of the Group's Housebuilding landbank and are being pre-sold in alignment with the Group's strategy, which aims to pre-sell approximately 65% of all units across the business.

The partnership agreement addresses the pressing need for affordable housing nationwide and stands out as one of the most significant new build residential investment transactions on record. 

It explicitly encompasses 1,522 units designated for the private rented sector (PRS), to be delivered to Leaf, and 1,393 affordable homes for rent and shared ownership, to be delivered to Sage.  

Vistry and Sage intend to make use of their existing Homes England grant funding under the Affordable Homes Programme to facilitate the initial phase of delivery for both rented and shared ownership affordable homes.

This agreement exemplifies Vistry's capital-efficient Partnerships business model, aiming for high returns. The Group anticipates receiving an initial cash payment of approximately £160 million in FY23, with additional staged payments throughout the development program.

Greg Fitzgerald, Vistry Group’s CEO, commented: “We have an excellent track record of working in partnership with Leaf and Sage to deliver new homes, and I am extremely pleased to have reached an agreement to grow these relationships through this exciting, market-leading opportunity. Through our unique Partnerships model, Vistry is maintaining the momentum of delivery of much-needed affordable housing across the UK. Our strategy gives the Group significantly greater visibility on earnings than traditional housebuilders, and this new partnership and others to follow will help us drive towards our medium-term targets and the delivery of £1bn of shareholder distributions over the next three years.”

Vistry share price. 

The Vistry share price rose 4.29% to trade at 761.1p from Monday’s closing price of 729.8p.