Igloo takes on Carillion’s share in JV on project with Coastline Housing

News08 Feb 2018Gavriel Hollander

Igloo Regeneration will take on the equity share previously held by Carillion in a joint venture housing development partnership with the failed contractor

The Carillion-Igloo JV has two live projects, including a custom-build scheme in Cornwall, working alongside Coastline Housing.

Neither the Cornwall project – known as Heartlands – nor a scheme in the Ouseburn Valley, Newcastle, will be affected by the collapse of Carillion last month, according to Chris Brown, executive chair of Igloo.

“We’ll continue doing the schemes we’ve got and we won’t be doing any more schemes with Carillion because it won’t exist anymore,” Mr Brown told Social Housing.

The Heartlands project consists of around 150 custom-build homes, including 90 managed by Coastline. The Ouseburn scheme features 76 low-energy homes.

Nathan Mallows, director of finance at Coastline, confirmed that the “vast majority” of work on the Heartlands scheme was already complete and that there were “sufficient funds” in the JV to build out the remaining elements.

“The collapse of Carillion has no effect of any consequence on Coastline’s completion of our part of the Heartlands scheme,” he said.

“Coastline, Homes England – previously the Homes and Communities Agency – and Carillion-Igloo worked together to bring forward the various parts of the remaining development land at Heartlands by jointly progressing – as separate companies – planning and then various elements of road, servicing and boundary treatments.

“The vast majority of this joint working has now been completed, leaving relatively small outstanding obligations that do not materially affect Coastline’s delivery.

“The first 20 of the 90 Coastline units are now completed, and the balance [is] expected in March. There has been strong interest in all tenures and the first customers have moved in.

“Carillion-Igloo has yet to start any construction in earnest, although is marketing its properties, and we understand has a handful of reservations.

“Carillion-Igloo has also confirmed to us that there are sufficient funds to complete the scheme,” he added.

Carillion-Igloo had been operating as a JV for a number of years, having been named on the Greater London Authority’s London Development Panel in 2012. It is understood the JV was not rebidding for a place on the panel.

The partnership company will continue to operate, with two Carillion directors set to be replaced by counterparts from Igloo.

It is understood there were no plans in place for more projects at the time of Carillion’s liquidation, but Mr Brown said that Igloo would not rule out working in partnership with other developers.

“We’ll do similar things on our own or with others,” he added.

“Partnerships are harder work than doing things on your own, so you only do them when there’s a real benefit.

“We still see situations where there’s a benefit to working with other private sector organisations.

“When we got into partnership with Carillion it was a substantially less risky business than it became over the past three years or so. It brought some good skills and – at the beginning – a really good balance sheet. But we watched that start to erode. That’s why we chose not to rebid on London.”

Addressing the collapse of Carillion, Mr Brown added: “It’s clearly been the most enormous mess, but the people I feel sorry for are those I deal with day to day on the property side of Carillion.”