Wren takes ‘extra care’

28/04/2008 Robert Tyerman

Wren Homes, the south-east England retirement homebuilder in which property entrepreneur David Slade has taken a ten per cent stake, is launching itself into ‘extra care’ development, with backing from Royal Bank of Scotland, to cater for longer-living homebuyers.

A 54-unit scheme at Tandridge in Surrey, which analysts believe could fetch up to £15 million, is the first of 11 planned by chief executive Paul Treadaway. He suggests that finance of up to £60 million could be on the table, even in today’s bleak lending environment.

Treadaway claims this strategy will ‘transform’ the AIM-quoted company. Its last annual results reflected poor housing market conditions with a £1 million pre-tax profits fall to £760,000 on turnover down 33 per cent to £2.2 million.

Wren will now offer assisted living homes at ‘significant discounts’ to care homes, which can cost from £25,000 to £50,000 a year, to buyers in developments offering optional facilities. These will include treatment rooms with, say, one hour’s care a week covered by management charges, as well as hairdressers and restaurants.

Carshalton-based Wren will outsource these services and occupants will pay for them as needed, changing the level of care as they grow older. On death, the homes will revert to Wren.

In some cases, the company will sell the projects to investment groups, and it says special financial structures will make the deals advantageous to both sides. Wren has a 710-unit land bank under option.

After collapsing from 75p a year ago to 16.5p in March, Wren shares have rallied to 28.5p, valuing the company at £11.3 million. Assisted living could assist further recovery.

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