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Surrey Council picks Places for People for £1.5bn joint venture
Surrey County Council has chosen major housing association Places for People as the partner for its £1.5bn joint venture (JV).
The venture is intended to deliver up to 10,000 homes on publicly owned sites in Surrey and East Sussex, which worked together on the procurement through their Orbis partnership.
In a meeting next Thursday, Surrey Council’s cabinet will vote on whether to confirm Places for People – the preferred partner of its cabinet member for property and business services – as a 50/50 partner in the limited liability partnership.
Places for People, which manages more than 189,000 homes, was shortlisted in April this year alongside four house builders.
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The association has just issued a trading update for the six months ending 30 September 2017, revealing a 20% rise in its surplus from the same period last year, from £37.1m to £44.7m.
The group’s turnover fell from £424.9m to £373.8m and operating costs went from £193.1m to £215.3m, but a dramatic reduction in its cost of sales – from £151.6m to £71.5m – allowed it to increase its surplus regardless.
It said that the results “further demonstrate the success of our diversification strategy and the continued drive for efficiency and focus on operating margins”.
Last month, the social landlord reached an agreement with McCarthy & Stone, the UK’s largest retirement house builder, to manage funds for the builder’s private rental properties.
If the Surrey cabinet agrees, the JV could also be made available to other authorities, including the district and borough councils and nearby police and health authorities. It is proposed that such authorities can create their own JVs as subsidiaries to the main JV.
This is an unprecedented move for a county-wide authority, which Inside Housing revealed in January. It would also mark a significant increase in Places for People’s development programme.
The association has diversified its activities significantly over the past year. As well as the arrangement with McCarthy & Stone, it has also been selected as the preferred merger partner for the troubled housing association Luminus.
Places for People declined to comment on the JV until after the cabinet approved the selection, and Surrey County Council did not respond to a request for comment.
