Barratt sells rental homes to Lloyds Bank subsidiary for £168m
Barratt Developments sells portfolio of 604 homes to Lloyds Bank subsidiary Citra for £168m in private lease deal
- Citra Living was founded in 2021 and is a private rental landlord
Barratt Developments has sold a portfolio of 604 new homes to Citra Living, a subsidiary of Lloyds Banking Group, in a cash deal worth £168.4 million.
The deal will see 500 homes completed and transferred to Citra by an expected date of June 30 next year, with the remainder slated for the same date in 2025.
Citra’s model is to retain ownership of the houses and then rent them out, acting as a corporate landlord.
Thanks to a strategic partnership between the couple in 2021, the homebuilder has already transferred 502 homes in individual locations to Citra.
Investors of Barratt Developments reacted positively to the transaction
Barratt Developments Shares were up 1.1 percent by noon on Friday to 416.8 pence, bringing performance so far marginally into positive territory for 2023.
Homebuilder shares have come under pressure in recent months as investors worry about the impact of rising interest rates and a slowdown in property completions.
Barratt has previously reported sales volumes significantly below last year’s levels.
Lloyds, the UK’s largest mortgage lender, launched Citra in 2021 with the aim of building 50,000 homes by the end of the decade.
This would make it a larger company than Grainger, the country’s largest private homeowner, and give it an estimated balance sheet of £4bn and £300m in pre-tax profits.
Citra and Lloyds’ most recent transaction includes 195 homes across four developments, with a gross asset value of £21.5m, subject to the satisfactory completion of Citra’s due diligence.
Barratt CEO David Thomas said: “The single-family home segment of the private rental sector continues to grow strongly and provides us with an opportunity to both diversify our revenues against the current challenging market environment and develop communities that encompass all forms of housing. .’
Citra Managing Director Andy Hutchinson added: ‘Our aim at Citra is to bring much-needed, high-quality housing to the UK rental market, to help create balanced communities in the places where people want to live.
“Our partnership with Barratt will help us achieve that goal and will help deliver much-needed housing stock in the UK.”