Places for People completes Derwent takeover
Places for People has completed the takeover of Derwent Housing Association, with the smaller organisation now sitting as a subsidiary in the larger group.
Derwent owns and manages 8,785 units between Sheffield in the north and Milton Keynes in the south. The group, which trades as Derwent Living, also provides student, retirement, key worker, shared ownership and market rented accommodation. It operates commercial activities through Centro Place Investments (CPI), a for profit company.
The merger was first reported by Social Housing in September 2016.
Derwent Living will retain its name and will continue to operate as a registered housing association, looking after homes across the Midlands. Its executive team is unchanged, with Peter McCormack continuing as chief executive.
David Cowans, PfP’s chief executive, and Chris Phillips, group chair, have both been appointed to sit on Derwent’s board. But Derwent ‘s board will remain responsible for the overall direction and performance of the business. Along with the boards of the group’s other registered social landlords - Places for People Homes, Places for People Living+, Cotman Housing Association and Castle Rock Edinvar – the Derwent Living board will report to Places for People’s Regulated Board.
A statement from PfP on Monday (9 January 2016) said the merger will enable Derwent to improve its supply of new homes over the coming years, increase its financial potential to deliver new products, and significantly enhance services available to customers through the ‘access to new expertise on offer’.
PfP has gained ‘an established foothold in the student housing market’, a new operational base in the East Midlands, and an additional resource through Derwent Living’s employees. PfP already owns or manages 150,000 homes and has a range of businesses including affordable housing, managing property, leisure centres and retirement housing, construction and energy services.
Derwent HA was downgraded to a non-compliant G3 and V3 governance and viability ratings by the social housing regulator in July 2016. The Homes and Communities Agency’s first in-depth assessment (IDA) flagged a number of concerns, from risk management and reporting to its ability to meet margin calls.
Mr McCormack said: ‘The opportunity to enhance and expand our services in partnership with such a pioneering housing provider was truly unmissable. We are genuinely excited about the future for Derwent Living, with the additional expertise and financial power on offer as a member of the Places for People Group.
‘Joining Places for People offers our staff and customers the best of both worlds; allowing our services and identity to remain tailored to our local communities, while benefitting from the financial security, economies of scale and opportunities that come from being part of a larger organisation.’
Mr Cowans said: ‘From the outset of our discussions, it became clear that one of Derwent Living’s greatest assets was its people and their working culture – which shares many similarities with our own. We look forward to welcoming the knowledge and expertise of Derwent Living’s employees to Group projects across the UK.
‘Student housing represented the last significant area of the housing market in which Places for People was not playing a major role. Gaining a partner with such a strong reputation in this area has completed the jigsaw, allowing us to offer tailored accommodation to people at all stages of their lives.
‘The addition of Derwent Living will not only provide a new operational base in the East Midlands, it will also enable the Group to rationalise its housing stock in the region, in order to deliver greater efficiencies that ultimately improves local services.’
Derwent Living is the third independent housing association to join the PfP Group. Castle Rock Edinvar in Scotland joined the Group in 2005, followed by East Anglia-based Cotman HA in 2009.
The group said both Castle Rock Edinvar and Cotman ‘have driven down management costs, whilst investing more in homes and communities’.
A short statement from Places for People to the financial markets on 21 December 2016 said: ‘The board of Places for People Group is pleased to announce that it has completed its merger with Derwent Housing Association. Derwent is now a subsidiary of Places for People Group.’
*This story was updated on 9/1/17 following a PfP press release.