Cala Group will start development on three new developments in Aberdeen as the housebuilder sees signs the market is set for a recovery.
Alan Brown, Cala’s chief executive, said house prices in the Granite city were “not increasing but not falling”.
And while most of Cala’s growth stems from the South East of England, its Aberdeen market, which Mr Brown dubbed the company’s “spiritual home” has “stabilised”. The firm has plans to start work on three new sites after a pause in investment in fresh developments in the region.
He said: “Aberdeen market has stabilised for us,” he said.
“We have been keeping our eyes on the market.
“In the last nine months for us we have seen prices not increasing but not falling.
“On the back of that we have invested in three new developments.”
He added that he believes the North Sea oil industry is “healthy again” as oil majors have cut costs and Chrysaor’s £3billion deal buy to buy Shell assets was struck.
He said: “The fundamentals of the north-east housing market are very much based on the oil industry. If the oil industry is healthy the housing market is healthy.
“If they (operators) are selling at $54 and costing at $20, that means the Aberdeen oil industry as healthy again.”
He added: “We have been there 140 years, we have a great team up there, it is our spiritual home. We are really pleased with what is going on up there.”
In a half year update Cala said it is on track to hit its £1billion medium-term sales target as it revealed it expects to deliver another record year of revenues and profits.
The Edinburgh-based house builder said the almost 1,500 plots it contracted its most recent half year has already outstripped last year’s turnover in terms of value. Cala topped sales worth £511.6million last year, while the market value of its contracted sites reached £648million in the six months to the end of 2016.
Cala, which is owned by private equity group Patron Capital Partners and the insurance giant Legal & General, acquired South East-based Banner Homes in a £200million deal in 2014.
Mr Brown ruled out the need for further acquisitions to meet its five year £1billion sales target.
“We have built on that acquisition. The number of staff has increased by about 30% since we acquired Banner Homes.
“We now have eight operating regions and we will deliver our £1billion per year from those regions. So we definitely don’t need to do any more strategic acquisitions.”
He added: “It is right to say most of our growth is going to come out of the South East.
“But that is only because we have gone from having two regions in the South East to having five.
“We are still growing all of our Scottish regions including Aberdeen.”
Cala stands for City of Aberdeen Land Association and was founded in the north-east in 1875.
