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M&G invests £30m in MMC house builder with 10,000-home target
Major institutional investor M&G has put £30m in equity into Greencore Homes, a modular house builder specialising in low-carbon and energy-efficient development.
The move follows an initial £15m investment by M&G into Greencore in January 2022, which gave it a majority stake.
At the time, M&G said it planned to plough up to £500m into the partnership over a period of several years, with the aim of accelerating the development of thousands of homes.
Announcing the new tranche of money, Greencore said the foundation has now been laid for it to become a national house builder, with aspirations to develop 10,000 homes over the coming decade.
The past year has not been kind to the modular sector as major players, including Legal & General, Ilke Homes and TopHat, have ceased operating or posted big losses.
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In October, Carl Leaver, chair of Goldman Sachs-backed TopHat, said there was “zero chance” of the government’s housing targets being hit without homes being developed using modern methods of construction (MMC).
Greencore believes its approach differs from most other MMC developers, which typically factory build large sections of each dwelling before transporting them to site.
The firm’s model involves building timber-frame panels in its factory, which are insulated with natural materials including hemp, lime and wood fibre, and then assembled onsite in a matter of days.
The homes are designed to meet the Passivhaus standard. According to Greencore, they will also meet a net zero carbon balance in operation and aim for better than net zero in terms of embodied carbon in the structure.
Both the original £15m investment and the newly announced £30m come from M&G’s Catalyst £5bn investment strategy, which targets innovative private companies focusing on sustainability.
Zach Webb, head of European investments at M&G Catalyst, said Greencore’s approach is a “unique and a disruptive solution with huge potential to scale”.
He added: “Our extra investment will create opportunities to deliver urgently needed high-quality, ultra-low carbon homes, using methods and materials that showcase what the future of the UK housebuilding industry could look like.”
Jon Di-Stefano, chief executive of Greencore, said: “Our vision is to lead the housebuilding industry in the delivery of climate positive homes and M&G’s further investment reflects their confidence in our potential to take on this role and operate at scale.”
“This investment will enable us to secure the land needed to deliver on our targets while supporting local communities, jobs and the environment,” he added.
“We look forward to continuing our strong relationship with M&G, while we seek out new partnerships to help bolster our pipeline and support our target of building 10,000 climate-positive homes.”
A House of Lords inquiry concluded in January with the warning that the government’s approach to MMC was in “disarray” and “simply throwing money at the sector hasn’t worked”.
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