£100m investment for modular housing manufacturer

A modular housing manufacturer has secured a £100m investment from new and existing shareholders to support significant expansion, including the opening of a production facility.

The investment into ilke Homes is being led by funds managed by affiliates of Fortress Investment Group, a global investment manager with about $46bn of assets under management.

Existing investors TDR Capital and Sun Capital also subscribed to the fundraising round, which was arranged by investment bank Citigroup.

The funding is set to help ilke Homes significantly scale-up its operations and open a new manufacturing facility that, once operational, will increase the company’s output capacity to 4,000 homes a year, creating more than 1,000 UK jobs.

The investment will also allow the company to invest heavily in automating more of its manufacturing processes to further drive productivity. This will in turn enable ilke to secure more sites and expand its ‘package deal’ strategy, which offers a full development service of land, infrastructure and homes.

Giles Carter, chief executive at ilke Homes, said: “Our latest fundraise demonstrates that the private sector is increasingly recognizing the investment case for change. With the race to Net Zero well and truly underway, the next few years will be a decisive time in the history of housebuilding, so it’s important that true market disruptors are empowered to play a leading role.

“Having pioneered a zero-carbon, zero energy bills solution in partnership with Octopus Energy and Gresham House, the new monies will allow us to roll out our proven concept across the country and shield consumers from the cost-of-living crisis. By investing to increase our manufacturing capacity, we will also create hundreds of skilled, green jobs.”

ilke Homes has grown revenue by more than 150 percent year-on-year. It with a host of developers and investors, including global asset manager Man Group, FTSE 250-listed housebuilder Vistry Group, and housing association Places for People.

It builds and supplies in excess of 1,000 homes a year from its facility in Knaresborough and has secured a pipeline of more than 4,000 homes.

Rahul Ahuja, co-head of European credit at Fortress Investment Group, said: “We are excited about our investment in ilke Homes. We see ilke Homes as the UK market leader in the manufacturing of modular housing and believe the company is uniquely positioned to increase the availability of high-quality affordable housing in the UK while accelerating the transition to net zero.”

Jonathan Mitchell, partner at TDR Capital, an existing investor in ilke Homes, added: “The success of ilke Homes’ capital raise in the context of the difficult current funding environment is testament to its innovative business model and dedicated management team. Having achieved triple digit growth across the group for successive years, ilke Homes is strongly positioned and capitalized to deliver in a market with strong long-term fundamentals.”

In June, ilke Homes launched a partnership with Octopus Energy and Gresham House to roll out the UK’s first homes to guarantee residents zero energy bills. The companies are partnering on a site in Stanford-le-Hope, Essex where ilke Homes is bringing forward a 153-home scheme.