Housebuilding firm, Vistry Group, has agreed an £819m deal that will allow it to develop 2,915 new homes.

The firm will merge its housebuilding operations into its partnerships business through the signing of a substantial partnership agreement with Leaf Living and Sage Homes, both of which are backed by Blackstone-managed funds and Regis Group.

Leaf and Sage are to acquire 2,915 units from Vistry, totalling a gross development value of £819m. The homes are on plots located across 70 of Vistry’s developments, with work to start this year and the majority of homes to be completed within the next two years.

The plots formed part of the group’s former housebuilding landbank and are being pre-sold in line with the group’s strategy of pre-selling around 65% of all units across the business.

Vistry CEO, Greg Fitzgerald, said: “We have an excellent track record of working in partnership with Leaf and Sage to deliver new homes and I am extremely pleased to have reached agreement to grow these relationships through this exciting, market leading opportunity.

“Through our unique partnerships model, Vistry is maintaining the momentum of delivery of much needed affordable housing across the UK.”

Vistry is expecting an initial cash receipt of around £160m in the 2023 financial year, with further staged payments across the development programme. In addition to releasing significant capital, the group suggested secured revenues can enable an acceleration of the delivery of units across the 70 sites.

The portfolio is expected to deliver an adjusted operating margin in excess of 12% and a return on capital employed of an estimated 40%, in line with the group’s medium-term financial targets.

Fitzgerald added: “Our strategy gives the group significantly greater visibility on earnings than traditional housebuilders and this new partnership and others to follow, will help us drive towards our medium-term targets and the delivery of £1bn of shareholder distributions over the next three years.”

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