Last updated 17 August 2022
Aster Group
Aster Group is a major registered social landlord (RSL), which owns and maintains over 34,500 homes, employs more than 1,720 people and has assets of more than £2 billion. The group turns over £240 million a year and has a £2.5 billion investment programme to deliver 12,000 homes by 2030.
Financials
In the latest financial year to March 2022, turnover at Aster rose to £240.7 million (2021: £224.5 million) and operating profits edged up to £75.3 million (2021: £74.0 million).
To view the financials for Aster, visit the group’s website here.
Operations
Aster builds new homes across the south of England from Cornwall through to Sussex, Gloucestershire, Oxfordshire, Surrey and London.
The group is a strategic partner of Homes England and will receive £114 million in grant funding to deliver 1,550 homes due to start on before the end of March 2026. 51% of those homes will be for shared ownership and 49% for affordable and social rent.
The group sources new development sites through land acquisitions, joint ventures and partnerships with other housing groups such as Mortehoe and Wollacombe Community Land Trusts, funding bodies such as Homes England, local authorities including North Devon County Council and private developers. The group also sources land through regeneration of its own estate, Section 106 agreements and CLTs.
In February 2020, Aster agreed a deal with Vistry Homes to deliver 1,359 homes by 2024. More than a quarter of these units will be affordable tenures with 250 for affordable rent and 96 for shared ownership, with the rest for private sale. Developments coming out of this agreement include a 130-unit development at Kilnwood Vale in Horsham, West Sussex, where 2,500 homes are being developed as part of a wide scheme (Project ID: 10367997).
Major residential schemes being developed by Aster include the £8.2 million redevelopment of a former police station in Christchurch to provide 170 homes (Project ID: 18161341) and the redevelopment of Prince Philip Barracks at Bordon Garrison in Hampshire to provide 27 flats and 25 houses (Project ID: 22176789).
Aster has been involved in a number of takeovers of smaller RSLs. In early 2020, East Boro Housing Trust from Dorset joined Aster. East Boro was established in Wimborne in 1960 and managed 427 rental units. The group is involved in mainly smaller developments but is also part of the proposed £121 million Bridport Gateway Care Campus Development with Morgan Ashley Care and Dorset Council (Project ID: 18202600). 5% (82 homes) of the units being funded by Homes England will be allocated for supportive living via East Boro Housing Trust
In January 2022, Central and Cecil, a housing trust based in London, joined Aster. C&C specialises in providing affordable housing and care for the over 55s and manages 1,840 homes. C&C also develops mainly smaller schemes but worked with Regal London to develop the £60 million Dora House scheme in St John’s Wood in central London, which is providing 153 sheltered flats and 129 flats (Project ID: 15381759).
In Inside Housing magazine’s 2022 ranking of the Top 50 developing RSLs, Aster was ranked seventh in terms of the size of its development pipeline. The group had 1,381 homes due to complete in 2022/23 with sites secured for virtually all of these units. Over the next two years, Aster expected to complete 3,251 units and sites had been secured for 2,310 of these homes. Over the next five years, Aster expected to complete 7,782 homes according to the survey.
In the financial year to March 2022, Aster delivered 939 new homes (2021: 921). Of this total, 768 of those homes were affordable homes with the remaining 171 homes sold on the open market through its joint venture with Vistry.
Glenigan Data
In the 2021 calendar year, Aster did not submit any detailed planning applications to build new homes according to Glenigan’s research (2020: 0 homes). In the 12 months to Q2 2022 calendar year, Aster awarded main contracts totalling £1 million (2021: £8.5 million).
Conclusion: Big plans afoot
Aster is a major developer of social housing and the focus is on sourcing land through partnerships rather than developing sites through the planning system with Glenigan’s research showing negligible activity on this front. The group also appears to develop sites through partnerships rather than using third party main contractors and the average main contract awarded to contractors for construction work fell to £0.9 million in the 12 months to Q2 2022 (2021: £4.2 million) according to Glenigan’s research.
The operating margin did ease back in the latest financial year but a figure of 21.8% (2021: 24.4%) is ahead of that achieved by many commercial housebuilders focused solely on units for private sale. In the latest financial year, sales of shared ownership homes and open market sales homes – delivered predominantly through joint ventures – totalled 540 units (2021: 470 units).
In addition to being a major developer of social housing, Aster also spent £80.1 million on repairing and maintaining its existing estate in the latest financial year.
Net debt has increased to £1,002 million (2021: £941 million) but gearing has reduced to 48.8% (2021: 52.8%) and Aster regularly issues bonds to secure finance. In July 2022, a £50 million bond was used taking the amount of bonds issued by Aster to £450 million.
With a major development pipeline, Aster will be among the industry’s biggest developing RSLs in the near term.
Winning Work With Aster
Aster Group spends around £110 million annually on a wide range of works, goods and services, which are all procured via the group’s portal. Prospective suppliers can register for free and view all tender opportunities here. A case study on the group’s procurement by consultants SPS can be read here.
Central & Cecil had a number of frameworks in place prior to the merger with Aster. These include a £95 million building maintenance agreement (Project ID: 20486120), a £50 million asbestos removal framework (Project ID: 20434267) and an £80 million demolition works framework (Project ID: 20276705). All these agreements run until 2025.
Key Aster procurement contacts include:
Development and sales director, Jane Gallifent – jane.gallifent@aster.co.uk
Tel: 0333-400-8222
Procurement manager, John Kearns – john.kearns@aster.co.uk
Tel: 0333-400-8222