Public Sector Plc unveils plans for 3,000 modular rental homes

Public Sector Plc has set its sights on delivering 3,000 modular rental homes in the UK by the end of 2022. It will do this under a newly launched platform, LetLife, which will partner with local authorities to help them deliver a mix of private and affordable family homes. LetLife is launching with 70 homes worth £15m currently committed in locations including the Isle of Wight and Kent, with a pipeline of 900 homes valued at £200m in talks. The move builds on PSP’s existing council relationships. The firm, launched in 2007, has partnerships with 19 local authorities in England, managing a £374m portfolio of development of more than 2,300 homes and 110,000 sq ft of commercial space. For councils, these partnerships allow them to retain ownership of their land, while for PSP it gains guaranteed work without the hassle and expense of going up against other developers. PSP will fund development for councils and then manage the assets on behalf of the local authorities in return for a share of the projected delivery cost. Adam Cunnington, managing director at Public Sector Plc, said: “What has happened historically is that the council identifies an opportunity for development, it goes out to market, people cut their throats in order to win the tender and then they spend the rest of the period trying to recoup all the money that they had to spend in order to win it. “You are almost put in an adversarial context and are fighting to try to make the thing work from a commercial perspective.” Reniera O’Donnell, assistant director of regeneration for the Isle of Wight Council, said: “It enables us to take more control over the quantity and quality of the new homes being delivered on the Isle of Wight, and provides a source of money in the future to deliver council services without having to give up council-owned land.” Cunnington added: “These local authorities tend to be more entrepreneurial and more risk-taking as a consequence of needing to step in where the market hasn’t done so. As a function of that, they have accumulated large portfolios of either income-producing assets or sites. With that sort of size you can deliver economic benefits, new jobs and housing.” PSP will deliver the homes through partnerships with offsite modular manufacturers ilke Homes and NetZero Buildings. This allows them to manage the costs and ensure pace of delivery. “Our biggest challenge will not be to secure that pipeline, but to make sure that we can deliver it seamlessly. We are talking with NetZero Buildings about new factories, understanding where we would put those and where the demand is going to be.” Neil Smith, managing director at NetZero, said: “The brief was to build a house that was indistinguishable from a traditionally built, on-site construction methodology, that was energy-efficient, affordable and could deliver the yields that PSP is looking for. “From our first factory in Cambridgeshire we are manufacturing intelligent, zero-carbon, energy-positive homes – which means residents living in our homes will benefit from ultra-low energy bills and be able to control almost every aspect of their home digitally.” The family-home BTR market has grown in recent years – with established players Sigma Capital and the PRS REIT, M&G and, more recently, the £100m fund from MGT delivering suburban rental homes in tech clusters around the South East. Various local authorities in metropolitan locations, including Birmingham and Barking and Dagenham have launched projects to deliver modular homes for their regions, attracted by the potential of low-cost, at-scale housing delivery in areas of high demand. To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette