Case Study - Garston Joint Venture
Joint ventures are an attractive proposition for us as it means that we do not need to supply all the capital required for the purchase of sites. This reduces the level of risk associated with developing the site. Participating in joint ventures allows us to be involved in a greater number of opportunities at any one time and also diversifies risk.
In Garston, Hertfordshire, we have a 50-50 joint venture with a private landowner on an 8 acre greenfield site. The site is currently being used as a grazing field for horses and has been allocated for 100 homes by the local authority. We have recently submitted a planning application. The proposed development will comprise 2, 3 and 4 bedroom houses and apartments with first time buyers as the target market. A separate joint venture company has been established with the board formed from both the landowner and Inland Homes. Inland manage the entire development process, from gaining planning permission to construction, marketing and sales for which we will charge the joint venture company a management fee for this service, which will cover some of our overheads.
Inland will provide significant added value for the landowner in this joint venture. They benefit from our planning expertise as we can secure a planning permission that will get the maximum value possible out of the land. We were able to unconditionally purchase the site for development, which differentiates us from other developers who buy sites subject to planning. The lack of conditionality made our offer very attractive to the landowners. By forming the joint venture with us, they are able to maximise their return and are able to extract some cash up front. They will receive half of the profit generated from the sale of homes, which is far greater than the return they would have made from selling the site to us without planning permission.
The Local Authority has allocated the site for development in 2026. Our due diligence has identified that the local authority is significantly short on its housing supply numbers. Our task is to demonstrate to the Local Authority that bringing this site forward for development at an earlier date will deliver them much needed housing and this will result in a much earlier return on investment for us.