The builder seeing green shoots in brownfield sites
IN 2015, to the dismay of thousands of locals, Tesco announced the closure of its headquarters in Cheshunt, Hertfordshire.
Jobs were lost, lives were changed and the 30-acre site has lain dormant ever since. Now AIM-listed
Inland Homes has been given planning permission to turn the area into an ‘urban village’ with 1,700 homes, shops, a school and a medical centre.
The deal solves several problems at once – boosting local morale, adding jobs and building much-needed homes. It is also good news for Inland Homes investors.
Midas recommended Inland Homes in 2013, when its shares were 32p. They have more than doubled since then, closing at 66p on Friday. The strong performance is well deserved. Under chief executive Stephen Wicks, the company has evolved from a land trader to a fully-fledged developer and housebuilder.
The business buys neglected brownfield sites, seeks planning permission to regenerate them and, once that is granted, turns them into places where people want to live, with reasonably-priced homes and other amenities.
The old Tesco site is Inland Home’s latest project, but it has more than a dozen others, such as a 100-acre site in Beaconsfield, Buckinghamshire, that used to house the Ministry of Defence School of Languages and will be turned into 350 homes, offices and parkland.
Converting brownfield sites can be complicated. At a development in Southampton, for example, Inland Homes found more than 150 skeletons dating back to the time of the Bubonic Plague.
But the rewards can be compelling, both for Inland Homes investors and local communities.
Wicks is a smart thinker. From a factory in Yorkshire he has started making modern prefabricated homes, that resemble highly coloured shipping containers from the outside, but are kitted out like fully-furnished flats inside.
Known as Hugg Homes, these containers are planted on brownfield sites where Inland Homes is awaiting planning permission, a process that can take years.
During that time, Wicks works in partnership with local authorities so they can offer these homes to families most in need of housing. This helps alleviate the housing crisis and provides Inland Homes with a rental income on sites that would otherwise lie vacant.
The Hugg containers are already in use in Southampton and Cheshunt, and are likely to be rolled out more widely. MIDAS VERDICT: Like Urban Logistics, Inland Homes is a property company with real defensive characteristics. At 66p, the shares have done well but there is considerable potential for growth. A strong hold for existing shareholders, the stock could also tempt new investors at the current price. And this business is not just doing well, it is doing good.