The Flintshire-based firm recently said the performance of the division was not “acceptable” after it made pre-tax losses of £1.7m in the year to the end of June 2010, on a turnover of £31m.
It has sold the business, which consists of eight sites with planning permission, to Springfield Properties, a private construction firm based in Elgin that will take on its staff. Springfield will pay £5m upfront with the rest of the money coming as it sells developments over the next three years.
Redrow will now focus on London and the South East of England where the property market is more buoyant and it can drive up its average selling price.
Chairman Steve Morgan said: “The board is pleased to have secured a buyer for our operation in Scotland following a competitive process that we outlined in our April statement. Springfield is a successful Scottish house builder and the transaction will substantially increase its presence in the central belt. The transaction will also provide our customers and employees with a good home for the future, whilst enabling Redrow to increase its investment in land in London and the South East.”
Family-owned Springfield said the deal will make it one of Scotland’s largest independent housebuilders and allow it to expand its operations throughout the country. It said its eight new sites – at Anniesland, Braehead, Dalkeith, Dunfermline, Inverkip, Kilwinning, Lenzie, and Motherwell – have the potential for 800 homes.