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Sovereign on track to meet 1,900-home development target
Sovereign is on track to meet its plan to build 1,900 homes this year, while its surplus was hit by fire safety spending.
In its latest update for investors, which covers the three months to December 2019, the housing association said it had invested £286.5m in development and completed 1,355 homes, 1,291 of which were for affordable tenures.
Sovereign had net debt of £1.8bn and available cash and committed liquidity facilities of £665m at the end of 2019, which it said provided sufficient liquidity to support its future development plans.
The landlord’s operating surplus for the period fell 6.9% on the same time last year, at £111.5m compared to £119.8m, which Sovereign attributed to an “increased focus and investment in existing homes, including fire safety”.
It now manages more than 59,000 homes.
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Net margin on sales was 25.9% for the three months to December 2019, compared with 23.8% at the same time the previous year. In the nine months to December 2019, Sovereign sold 505 homes.
In November, the association issued a £375m own-name bond to fund its development activities, and in common with other large landlords, it is keen to work within environmental, social and governance targets.
It said: “Following our recent successful bond issuance, we’ve joined a sector-wide working group to deliver a framework for housing associations to report on their environmental, social and governance credentials.”
This group includes representatives from housing associations, investors, banks and lawyers, it said.
Sovereign also said it will move into its new head office in Basingstoke during the first quarter of the next financial year, after completing the sale of its current Newbury headquarters.
Some large housing associations, particularly those with a London focus, have been forced to alter development plans in recent months amid rising fire safety costs and challenging housing market conditions.
Giant landlord L&Q said last week that its decision to pause some of its developments had helped its financial position to stabilise over the past nine months.
Inside Housing Development Summit 2020
Inside Housing is pleased to join forces with Homes England and the LGA to introduce the Inside Housing Development Summit.
Taking place on 27-28 April 2020, the summit will gather together local authorities, housing associations, developers, fund managers and advisors for a Chatham House style event focussed on making new connections and exploring new delivery models.
The summit will take place over 28 hours, starting with an afternoon plenary on 27 April, an exclusive development site study tour to Northstowe, England's largest new town since Milton Keynes, followed by a business dinner.
The second day will provide opportunities to network with a range of senior Homes England and LGA staff including Nick Walkley, chief executive of Homes England and Mark Lloyd, chief executive of LGA.
You’ll also meet with leaders from across the development ecosystem and take part in group discussions to help you connect and explore new opportunities. All accommodation and meals will be provided within the fee.
Places for each stakeholder group are limited to ensure a balanced mix of participants and to make sure you leave with the relationships and leads you need.
Click here to book your place or for more information
