Barratt puts Wilson Bowden Developments up for sale

Housebuilder Barratt is to put its commercial development arm, Wilson Bowden Developments, up for sale.

The possible sale follows a strategic review of the business carried out last year by Barratt who bought Wilson Bowden last April for £2.2 billion. However, a £1.7 billion debt burden has put on pressure for Barratt to raise cash through partial sales.

It is open to offers for the whole of Wilson Bowden Developments, however, the company could also be divided into two or three parts, such as retail development and office and industrial development.

Analysts at UBS believe Barratt would make at the very least £195 million from the sale of Wilson Bowden, which it forecasts will have sales of approximately £100 million this year.

It is also understood that Barratt could sell the Wilson Bowden Developments Scotland mixed-use arm, which is developing the £600 million Ravenscraig project with Richardsons Capital, in a separate transaction.

According to Property Week, Jones Lang LaSalle Corporate Finance has been asked to help with the sale of Wilson Bowden Developments. Barratt and Jones Lang LaSalle will be executing the sale at a challenging time for both the residential and commercial property markets.

Along with rival Taylor Wimpey, Barratt has scaled back its land-buying operations. It is particularly exposed to the first-time buyer market which is dwindling due to the withdrawal of mortgage products due to the credit squeeze.

Barratt is the second-largest homebuilder by volume and No.3 by market value. In February, Mark Clare, Barratt’s chief executive, said the outlook for the second half remains difficult but is more positive in sales terms than we had predicted, added Mr Clare.

Last December, the housebuilder was demoted from the FTSE-100 to the FTSE-250.

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