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ilke Homes to scale up operations with £60m funding
Modular housing provider ilke Homes has raised £60m in a recent fundraising round, putting the company on course to become a top ten housebuilder within the next five years by delivering 10,000 factory-built homes. The £60m raise is split between £30m debt from government agency Homes England and £30m of equity from multiple new investors.
The new funding will allow ilke Homes to invest heavily in automating more of its manufacturing processes to drive efficiencies, secure more sites and expand its ‘package deal’ strategy, which offers full development service of site, infrastructure and homes in a rapidly growing market.
By manufacturing offsite, ilke Homes is able to deliver precision-engineered homes twice as fast than traditional methods of construction, helping investors access revenue streams faster. The monies will also be used to scale-up production and accelerate capacity to deliver up to eight homes a day, up from two today – all helping to bring down manufacturing costs in the process.
The Guinness Partnership, one of the UK’s largest providers of affordable housing and a customer of ilke Homes, is one of the new equity investors. The housing association has signed two deals with ilke Homes in the last year, for sites that will deliver 250 factory-built homes. Tech-focused investment company Middleton Enterprises and private equity firm Sun Capital have also taken equity stakes. TDR Capital has also injected further equity.
The £30m of debt comes via a facility from Homes England’s Home Building Fund. The government’s housing agency invested an initial £30m into ilke Homes back in 2019, which marked the first time the agency had ever directly invested to boost an offsite manufacturer’s production capacity.
The announcement comes at a time when the government is championing offsite manufacturing – where homes are manufactured along production lines in a factory – as a solution to ramping up the delivery of high-quality, energy-efficient housing across the UK to tackle climate change and acute housing shortages.
Stephen Robertson, founding partner at TDR Capital, said: “The defensive attributes of residential property are attracting unprecedented levels of investment globally, but without a meaningful strategy to build greener, more energy-efficient homes at scale, we have no hope of meeting climate targets. Precision-engineering housing will be a critical solution to greening cities and with housing needs continuing to significantly outstrip supply, we are also confident that this sector is immensely scalable. We believe there is huge potential for multiple other investors to work with us on spearheading this positive change.”
Harry Swales, chief investment officer at Homes England, added: “Manufacturers like ilke Homes are vital if developers are to build new sustainable homes at the pace and scale the country needs. This debt facility from the Home Building Fund shows our commitment in increasing productivity and efficiency in construction to meet government’s housing delivery ambitions.”