Industry heavyweights partner on £1bn modular housing drive

Property veterans Robert Whitton and Nick Shattock have launched a modular housing business targeting £1bn in opportunities. Impact Capital Group will develop large regeneration sites and small smart neighbourhoods via land acquisitions and joint ventures with the public sector. The company has secured £100m from a UK private family office and has acquired off-site manufacturer Lesko Modular as well as a handful of sites around the South East. [caption id="attachment_1033293" align="alignright" width="250"] Robert Whitton[/caption] Plans are under way for Impact’s first major scheme in Romford town centre and the company is in advanced talks on schemes that would bring the gross development value of its portfolio to £1bn over the coming months. Founder and chairman Whitton made his name in the noughties recession when he co-founded the £1bn aAIM Group and later ROM Capital, managing distressed assets and pre let development opportunities. “The vision is to try and shorten the gap between the developer’s vision and the physical construction, because it is a very elongated and difficult process,” he says of Impact’s business plan. “It is to bring that whole development process under one roof, to modernise and streamline it and to create the certainty of control throughout that process.” The platform will allow Impact to manage land acquisition, design, planning, manufacturing and property management. It is also exploring options to deliver social housing as a registered provider, as part of the end-to-end development model. Modular hurdles [caption id="attachment_1033292" align="alignright" width="250"] Nick Shattock[/caption] The group has three businesses: Impact Modular, Impact Developments and Impact Smart Homes. Lesko’s chief executive, James Pleszko, has become chief executive of Impact Modular. The business aims to scale up production over the next six months, fuelled by its own development pipeline, as well as third-party contracts with public sector institutions, councils and RPs. It has existing deals with Bristol City Council and the NHS. Whitton will manage the Smart Homes neighbourhood expansion, while strategic regeneration will be handled by Impact Development, spearheaded by former Quintain chief Shattock. “What we can do with modular has entirely changed the game, once again, on these regeneration sites,” Shattock says. “As a developer you control the logistics and the means of production and our partnerships mean we can deliver with far greater speed and with far greater margins.” Despite a considerable fervour around modular housing, other major providers, including L&G’s modular business and ilke Homes, have racked up losses and are yet to scale. Shattock and Whitton say this won’t be the case for Impact. “Our own pipeline will give the modular business sufficient capacity to keep running,” says Whitton. “That has been one of the issues for a lot of companies. They get a break in their pipeline of orders and that is catastrophic, they literally have to pause the company.” [gallery type="slideshow" link="none" columns="1" ids="1033330,1033328,1033331,1033329"] Rapid expansion Impact’s first major development will be the redevelopment of Rom Valley Way in Romford, Havering, after acquiring the seven-acre site for £16m. The former ice rink has consent for 620 flats, including 242 build-to-rent homes. The developer plans to “materially” boost this with revised plans in line with the emerging town centre development plan, to deliver a £350m scheme. The Smart Homes division has a further five schemes in excess of 1,000 homes, also in early planning stages. These branded schemes will use digital tools to deliver information and energy savings to renters and home-owners. Impact Developments will target strategic schemes of up to 2,000 homes. It is agreeing terms on two major joint venture regens in the South East and will be eyeing opportunities as developments fall into distress as a result of coronavirus. Whitton and Shattock will engaging directly with the government as it seeks to bolster the industry, following a series of investments last year with Urban Splash and ilke Homes. “The direction of travel from the government in regeneration agencies will be towards modular and different ways of delivering homes,” says Shattock, adding that the combination of build-to-rent funding models and modular delivery will speed up development coming out of the pandemic. “The change in the model is going to be accelerated, and we hope to be a fundamental part of that, if not at the forefront.” To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette