Innovative investment deal delivers £90 million UK housing boost

Why the world’s largest modular housebuilder, also Japan’s biggest housebuilder, has moved into the UK housing market.

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£90 million deal

Urban Splash wanted to secure investors for its modular housebuilding business. What was needed was an innovative partnership that could bring together the private and public sector to support the construction of thousands of new family homes.

"We interviewed JLL for this role alongside many other advisors, including investment banks and big four firms. The combination of their impressive real estate credentials, industry connections and financial acumen were unique selling points as was their clarity of vision on the best way forward. The determination of the JLL team, over the last 16 months, was exceptional and this transaction could not have been delivered without their leading role – we certainly appointed the right advisor."

Julian Curnuck, Chief Financial and Operating Officer, Urban Splash

How we worked together

It was important to put together working relationships that would allow House, Urban Splash’s housebuilding business, to achieve its aim of increasing modular housing delivery to allow more people to own their own homes and in a shorter build time.

This was a complex deal that required us to work collaboratively and look outside traditional solutions to find the right fit. We used our global capital insights and knowledge of the residential and public sectors to identify Japan’s biggest housebuilder, Sekisui House, and Homes England as potential partners.

Sekisui House, are pioneers of modern methods of construction, where homes are built in factories before being moved on-site. While Homes England, a public body which acts as the UK Government’s housing accelerator, is keen to increase the pace of house building to address housing shortages.

Our insight and market knowledge allowed us to structure and execute a £90m investment deal that brought together private and public investors, with an alignment of ambitions.

In total we spent several years working with Sekisui House, having first discussed their investment appetite in 2014, and 16 months advising Urban Splash, structuring a complex £90 million deal to fund a comprehensive modular construction programme with sustainability at its heart. We coordinated all aspects of the transaction, bringing together our various teams to find a unique solution, which included debt and equity funding. As lead financial advisor, JLL also led on all aspects of the legal and due diligence processes.

The deal allows House to deliver thousands of new modular homes across England. Sekisui House are initially investing c.£22 million for a 35 percent equity stake in the House business, whilst Homes England are providing £30 million of equity and debt funding.

Resolution

The result? A unique partnership with the potential to transform housebuilding across the UK by using modern methods of construction to deliver high quality sustainable homes with shorter build times.