Legal & General’s decision to sell its house-building segment has sparked interest from major players.
- Persimmon is reportedly preparing a bid for Cala Homes, valued at £1 billion.
- Other potential bidders include Taylor Wimpey and Avant Homes, heightening the competition.
- The sale is significant, given Cala Homes’ rich history and recent financial performance.
- Cala Homes boasts a substantial landbank, enhancing its appeal to prospective buyers.
Legal & General has decided to divest its remaining house-building division, namely Cala Homes, which has attracted the attention of some of the UK’s largest homebuilders. This move comes a year after the insurer exited the modular housing manufacturing sector, aiming to streamline its operations.
Sky News has reported that Persimmon is among the interested parties considering a bid for Cala Homes. This potential acquisition is valued at approximately £1 billion. The interest from Persimmon is significant as it underscores the company’s strategy to expand its portfolio and market presence within the UK housing sector.
Beyond Persimmon, other notable contenders contemplating bids include Taylor Wimpey and Avant Homes. Avant Homes is particularly interesting in this context, as it is backed by private equity and led by Jeff Fairburn, the former Chief Executive Officer of Persimmon. This background adds a layer of complexity and intrigue to the unfolding narrative of the sale.
Cala Homes is not just an ordinary entity in the housing market. Established in 1875 as the City of Aberdeen Land Association, the company carries a rich heritage and a strong reputation. In 2023, Cala Group achieved a turnover of £1.25 billion, a pre-tax profit of £104 million, and completed 2,917 home sales across 82 sites in the UK.
Additionally, the company has ambitious plans for future developments. In the same year, Cala contracted 19 new sites designed to deliver 2,705 new homes, with a projected gross development value (GDV) of £1.4 billion and an average selling price of £526,000. Furthermore, Cala’s landbank comprises over 21,000 plots, which translates to a GDV of £8.85 billion, significantly enhancing its allure as a target for acquisition.
The impending sale of Cala Homes presents a pivotal moment for UK house-building, attracting significant interest from industry giants.
