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Housing association to acquire North West neighbour
Housing association Bolton at Home is set to acquire its fellow Greater Manchester landlord Arcon in a bid to capitalise on surging demand across the region.
Bolton at Home, which manages around 18,200 properties in the Bolton area, and Arcon Housing Group, which has around 1,200 homes across Greater Manchester, revealed today that talks are at an “early stage” over the deal, but both boards have given their backing.
Speaking to Inside Housing, Jon Lord, Bolton at Home’s chief executive, said the deal would allow the association to spread across the North West. “With devolution we have an interest in Greater Manchester and though Arcon is smaller, it is more geographically spread,” he said.
“We operate in a relatively low-value area, Bolton, and it makes sense to develop in a range of areas.”
He added: “Them being them is advantageous to us and us being us is advantageous to them.”
The landlords are both part of the Greater Manchester Housing Providers group, made up of 25 housing organisations, aimed at building 16,000 homes in the region over the next five years.
As a joint entity, Bolton at Home and Arcon said they would look to deliver more than 1,300 new homes by 2023.
Bolton at Home was originally an ALMO, wholly owned by Bolton Council. In 2011, the group acquired its housing stock from the council and launched as a housing association.
Mr Lord admitted that since its transfer the past five years have been “financially challenging” due to austerity, including the 1% rent cut introduced in 2015.
In its last reported financial year to March 2017, the group’s surplus slid 18% to £12.4m, while turnover was broadly flat at £81.9m. Net rental income stood at £74.6m.
However, refinancing has seen the group increase its resources for development, Mr Lord said.
He said he expected the deal to acquire Arcon would complete by next April, when it will become a subsidiary of Bolton at Home.
The two groups originally began talks to form a development JV but this led to talks for the larger group to acquire Arcon.
Bolton at Home employs around 930 staff and Arcon 25. No redundancies are expected and staff numbers are likely to grow, Mr Lord said.
However he admitted that finding land and construction costs would remain a challenge to expansion.
He declined to disclose the value of the deal at this stage.
