We recently celebrated the final sale at Castle View, a regeneration of five run-down blocks of 1960s flats in Newbury.
I showed our local MP, Richard Benyon, around the completed scheme to show him how the new residents are building a community there.
Formerly known as Kersey Crescent, this estate had come to the end of its useful life. We struggled to rent the homes, and had worked for years on a new plan for the site.
But difficulties in producing a viable replacement affordable housing scheme and subsequent reduced grants for housing associations meant the redevelopment we had planned was no longer able to progress. However we also felt there was an opportunity to make housing available to a wide range of people on what had the potential to be a high profile site along the Bath Road, a key gateway to Newbury.
So we tried something different.
We unlocked the site by creating a joint venture with well-known housebuilder David Wilson Homes who like ourselves have a strong local presence and commitment to Newbury.
This joint venture meant bringing together our land with David Wilson Homes’ expertise in producing impressive schemes for sale such as the high profile development at Newbury Racecourse where we have worked closely with them for a number of years.
What followed was a true partnership, one that’s solidified a new model for development at Sovereign, and has even helped us unlock other sites.
Now, Castle View provides 78 high-quality homes and has regenerated a key entrance to Newbury. There’s a mix of flats and houses, and tenures ranging from social rent to shared ownership and outright sale.
What’s more, we’ve created a proven joint venture model – one that’s scalable, and can be replicated – to ensure a win-win partnership in our future developments.
This model has helped us become more nimble as we collaborate more closely with the private sector, while allowing us to stay true to our roots and our social purpose.
Tips for joint ventures
- Careful selection of partners is key. Our relationship with David Wilson Homes is built on trust, and this open approach has allowed us to deliver more.
- Start the important conversations early on. Talk about the types of properties you envision, how the management will work, and so on. This will minimise the costs for you and make the homes more affordable for your residents.
- Be prepared for a very different way of working. For example, a joint venture gives you the opportunity to speed up or slow down the speed of the programme to maximise the return, which is something that is difficult to achieve if you appoint a traditional contractor.
- It’s crucial that you understand the risk profile. When you deliver a scheme in the more traditional fashion and use a framework contractor, the contractor is building on a fixed price contract with a set completion date and takes most of the risk. Our approach to this joint venture was open book, so along with a potential increased commercial return, you’re taking on an increased contracting risk.