An investment of £15.5 million has been agreed between BGF, the UK and Ireland’s most active investor, and property developer Burrington Estates, to support the ambitious growth plans of the Exeter-based business.
Burrington Estates launched its New Homes business in 2016 and its Commercial industrial development business in 2019, creating two distinct divisions – Burrington Estates New Homes and Burrington Estates Commercial. The New Homes division has built over 400 homes worth £120 million across the South West during the past five years, building a brand and reputation for quality customer service and design.
With a business plan to grow both divisions and with a significant pipeline of controlled land to be built out, Burrington Estates sought investment to support its progression to successfully move into the next phase of growth.
From the £15.5 million investment, £13.5 million will support the expansion of Burrington Estates New Homes. Currently there are six sites in active development across Devon and Cornwall. A Midlands region is now established with offices in Stratford-upon-Avon. Nationally there are 14 new site-starts in the pipeline during the next 12 months.
In the Midlands, land has already been secured in Deddington and Binfield to develop 104 homes, building on the successful developments achieved to date across the South West. The focus is to grow New Homes’ turnover to exceed £200 million and increase the number of houses to over 600 per annum within the next five years.
BGF’s investment and Burrington Estates’ progressive growth plans reinforce the positive momentum in the property market at the end of 2020, with the Bank of England stating that mortgage approvals reached a 13-year high in 2020. The pandemic has generated strong house sales in regional markets.
With the Stamp Duty holiday likely to be extended until the end of June in the Chancellor’s March Budget, Burrington Estates is enjoying a strong forward sales position. Demand for houses in the South West remains very strong from people looking to relocate to enjoy the lifestyle benefits.
The additional £2 million investment has been allocated to Burrington Estates Commercial to enable the development of business parks in the South West, enabling small companies to acquire their own business units. The first two business parks, SkyPark in Exeter and Eurotech Park in Plymouth have received high levels of interest and demand due to their high-quality, flexible, and sustainable credentials with 80% of units reserved off plan for both locations.
Mark Edworthy, managing director of Burrington Estates said: “BGF’s investment and strategic insight is hugely welcomed in the development of Burrington Estates and is integral to the future success of our organisation. We have found real chemistry with the BGF team and look forward to partnering with them and receiving their advice and guidance. We also intend to become a strong player in the BGF community. We already work with three other BGF portfolio companies.”
The deal was led by James Skade, Hannah Waters and Alex Garfitt from BGF.
James Skade, BGF investor, said: “Burrington Estates is a really exciting investment for BGF – as a progressive and forward-thinking property developer, both the residential and commercial divisions are bringing a fresh approach to the sector and have impressive plans for growth. We look forward to being part of that journey.”
BGF has strong experience in backing regional developers across the UK & Ireland, with investments in Woodall Homes, Braidwater, Campion Homes, Winterbrook, Apex Housing Group and Cussins. The latter going on to be acquired by Northumberland Estates.
A spokesperson from Paragon Bank PLC said: “We have been working with Burrington Estates housebuilding business since its launch in 2016, supporting their projects across the South West of England. In the last five years Burrington Estates have built an outstanding reputation for both quality and design, whilst remaining an efficient housebuilder. With the additional equity from BGF and the appointment of David Jervis, the new Midlands region has exciting plans to enhance the Burrington brand. We look forward to supporting those plans through our bespoke development funding.”
The advisors to the transaction were:
- BGF: Tim Roberts, Isaac Paine, Burges Salmon (Legal). Tom Ayerst, Matt Tomlinson, PwC (Financial Due Diligence). Dave Taylor, Paul Halliday, PwC (Tax),
- Burrington Estates: Andrew Tubb, Marion Bennett, Birketts (Legal). Mark Champion, Isca Ventures (Corporate Finance).