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Property advisor to buy house builder for £267m

Property advisory firm CBRE has announced it is to buy house builder Telford Homes for around £267m, as it seeks to gain a foothold in the build-to-rent sector.

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Property advisor to buy house builder Telford Homes for £267m #ukhousing

The all-cash deal for 350p per share represents a premium of about 11% on Telford’s closing price on London’s AIM market on Tuesday. Its shares rose more than 12% after the deal was announced.

Telford Homes reported in May that it had suffered a fall in annual profits of almost 13%, as fears about Brexit continued to dampen the housing market in London, where it mostly operates.

Two years ago, it changed its model to build more rental homes rather than properties for private sale, in response to high demand in the capital from people struggling to get on the housing ladder.

Bob Sulentic, chief executive of CBRE, said the deal would enable CBRE to take advantage of a shift in people’s housing needs.

“The UK is in the early stages of a secular shift toward institutionally-owned urban rental housing, similar to what we have seen in the US over the past two decades,” he said.


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After the completion of the deal, Telford will become part of CBRE’s Trammell Crow Company, a Texas-based real estate developer and property manager, which CBRE acquired in 2006. Telford’s chief executive, Jon Di-Stefano, will remain in charge, and CBRE said it sees “limited” scope for cuts to Telford’s 300-strong workforce.

Andrew Wiseman, chairman of Telford Homes, said the board believed that the offer represented “fair value for shareholders”, given the company’s market positioning, the current operating environment, and the underlying value of its portfolio and pipeline.

“The board remains confident in the long-term prospects of the business. However, the board also recognises the risks posed by the political and macro-economic environment, as well as the already stated impact on the group’s short- and medium-term profitability from the implementation of its new build-to-rent strategy, which is lower margin in nature,” he said.

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