Barratt Developments has agreed to build and sell 604 homes to Citra Living, a subsidiary of Lloyds Banking, for £168.4mln cash or £278,00 each on average.
The housebuilder will recognise revenue and profit on the legal completion of each home under this future sale agreement, though over 500 are expected to be transferred to Citra's ownership over the 12 months to 30 June 2024 and the rest in the following year
Barratt added the current gross asset value of the 604 homes is £72.4mln, comprised of the current balance sheet aggregate value of the land and work in progress.
David Thomas, Barratt’s chief executive, said: “Since forming our strategic partnership in 2021, we have agreed the sale of some 502 homes on individual sites to Citra.
“The single-family dwelling segment of the private rental sector continues to grow strongly and presents an opportunity for us to both diversify our revenues against the current challenging market backdrop."
Victoria Scholar, head of investment at interactive investor said “Rental costs have been going through the roof lately”.
“Citra is trying to increase supply to the rental market to respond to this surge in demand.
“For Barratt, this means a modest cash windfall at a time when its share price has been struggling.”
Shares in the builder rose by 0.7% to 415.4p while Lloyds added 1.5% to 43.4p.