Homebuilder McCarthy & Stone valued at £967m on stock market debut

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McCarthy & Stone, Britain’s biggest builder of homes for retired people, said its London debut had been priced at 180 pence per share, valuing the business at £967m.

Shares in the company rose 13.5 per cent to 204.21 pence in conditional trading on Friday as investors bet on further gains in the UK’s strong residential property market.

McCarthy & Stone, which has developments in Leeds, Otley and other locations in Yorkshire, targets £90m from the initial public offering (IPO) to help fund a £2.5bn investment in land and construction projects over the next four years.

The listing comes when an acute shortage of housing property in the UK has steeply pushed up prices and driven up the valuations of listed builders, such as Taylor Wimpey, Persimmon and Barratt Development.

Now as some investors begin to view traditional property stocks as priced out, their yield hunt is making them keener on tangential areas such as student housing, retirement homes and the private rental sector.

McCarthy & Stone was the first British developer to offer owner-occupied retirement housing in 1977 and has since sold around 50,000 homes. Its typical properties include private apartments for retirees and shared ground floor facilities.

When the company announced plans to list in October, chairman John White said that around 3.5 million Britons were interested in purchasing a retirement property, but only 128,000 had been built as of April 2014.

McCarthy & Stone was listed in London for 22 years before being taken private through a £1.1bn pound deal in 2006 by a consortium led by Halifax Bank of Scotland and including Scottish businessman Tom Hunter and the Reuben brothers. It was later bought by a consortium including Goldman Sachs and TPG.

The IPO comprises of about 186.9 million shares, or about 35 per cent of its issued share capital on admission, the company said.