Peabody and Catalyst eye merger to create 100,000-home group

Under the proposed merger plans, 34,000-home Catalyst would join 66,000-home Peabody in spring 2022 as a subsidiary.

The groups said that their combined financial capacity would allow them to “share resources, be more efficient and meet their commitment to build affordable homes and places with safety, quality and energy efficiency at the core”.

In results also published today, Peabody recorded pre-tax surplus of £110m for the 2021 financial year, while Catalyst recorded a figure of £82.4m in its last full-year accounts to March 2020.

Should the proposals proceed, Catalyst’s current chief executive Ian McDermott would lead the new organisation, the statements said. Mr McDermott will also take over as interim chief executive of Peabody when the group’s current head, Brendan Sarsfield, leaves at the end of September.

Peabody’s chair Lord Kerslake will be designate chair for the new organisation, with Catalyst’s current chair Ravi Rajagopal becoming designate vice-chair.

Resident consultations will be launched in the summer, ahead of the boards considering their feedback and deciding whether to proceed with the proposals in the autumn.

Commenting on the plans, Mr McDermott said: “We believe that we can go further and faster together. With our shared aspirations and geographical reach, we can create an organisation which has customers at the front and centre of its thinking and planning.

“We will have a stronger local focus and be more connected with our communities. We can combine this with the benefits of scale and the ability created by the larger organisation. It is difficult to imagine two organisations with more closely aligned values and vision for the future.”

Lord Kerslake, chair of Peabody and designate chair for the combined organisation, said: “Our new association will have around 100,000 homes, and I believe that this scale, combined with our local knowledge, will enable us to provide valuable insight from our residents’ experiences to help better inform policy and have a positive impact on life chances. We’ll look forward to working with government and partners to develop innovative solutions that improve services to customers, enhance building safety and reduce carbon consumption.”

A number of merger proposals in the sector have emerged – and in some cases collapsed – in the course of the current calendar year. PA Housing and Accent walked away from merger talks in May, just two months after they began, while Southern and Sanctuary dropped their partnership discussions in April.

Elsewhere, Liverpool-based Riverside, which manages 58,000 homes, and 17,000-home G15 landlord One Housing announced they had begun merger talks of their own last month (June).