Terrace Hill inks €110m buy of UK development firm

Terrace Hill has signed an agreement to acquire UK unlisted property company Urban&Civic as part of plans to create a new main market listed development group.

As part of the agreement, Terrace Hill will issue 43 million shares to fund the acquisition, effectively valuing Urban&Civic at £93.5 mln (€110 mln).

Following completion of the acquisition, the enlarged group will operate under the name Urban & Civic.

The deal will allow Urban&Civic's founders Nigel Hugill and Robin Butler to return to the listed sector, where they were previously active respectively as CEO and co-founder of Chelsfield and executive chairman of Lend Lease Europe.

'We are back in the arena where we feel happiest,' commented Hugill, executive chairman of Urban&Civic.

In a statement, Terrace Hill also said that it intends to raise £170 mln through the placement of 75.5 million shares at 225 pence a share. The issue will strengthen the company's finances and allow it to deliver existing developments as well as acquire new opportunities.

'The acquisition will create a new UK real estate company with a network of regional offices and a focus on large-scale strategic residential holdings and commercial development opportunities across Central London and the UK’s regions,' the company said. The new combine will have a post-transaction market cap of £315 mln.

Urban&Civic is the owner of two large strategic residential land sites in the UK which, combined, have a resolution to grant outline planning consent for 11,200 houses with a built out value of £2.7 bn. The first is the 1,432 acre Alconbury Weald site near Huntingdon in Cambridgeshire which the group will seek to develop over the next 20 years. The second is a 50% interest in a 1,170 acre development site in Rugby.

CBRE has valued the Alconbury site at £101 mln and the Rugby site at £55 mln.

Robert Adair, executive chairman of Terrace Hill, commented: 'Our shareholders should benefit from the greater visibility and improved liquidity that the Main Market listing and larger capitalisation will provide.'