Annington Homes

Annington Homes is one of the largest private owners of residential property in England and Wales


Annington was created in 1996 to acquire more than 57,400 residential properties from the Ministry of Defence (the MoD), the majority of which were immediately leased back to the MoD on a 200-year lease. Annington refurbishes and sells them or rents them out on the open market.

The business now owns approximately 40,000 homes, the majority of which are still leased to the MoD.


Investment strategy

Asset-Backed: Annington acquired 57,400 residential properties – making it one of the largest private owners of residential property in England and Wales. Currently Annington owns almost 40,000 homes, with most still leased to the MoD.

Requiring Fundamental Change: A new business was created to manage the properties Annington leased to the MoD and to refurbish and sell or rent on the open market those homes released by the MoD as surplus.


Creating Value

  1. Transforming strategy

    • The strategy for the newly created business was to develop a flexible and cost-effective refurbishment and sales capability to maximise the potential from sites released by the MoD, and to explore specific opportunities related to either the existing portfolio or further MoD housing requirements.
    • Annington created a flexible sales organisation to deal with fluctuating numbers of properties released in unpredictable geographic locations. Through sensitive pricing strategies and the careful use of incentives, home ownership has been made a realistic option for those who have previously been priced out of the UK’s property market. Annington has sold nearly 18,000 homes to the public, with the majority sold to first-time buyers, and many to Service or ex-Service personnel.
    • Since 2004, Annington has built or achieved planning permission for more than 2,500 new homes, of which more than 1,000 have been affordable homes.
  2. Strengthening management

    • The properties were acquired with no management. A team was appointed to establish an effective governance and operating structure. Annington’s operating model is based on a small core team that uses outsourcing as a major tool to meet the fluctuating requirements of the business.
  3. Developing through capital expenditure

    • Capital expenditure has been deployed on property and site improvements to maximise the value from house sales. With the types of properties that Annington owns, the location and environment are very important and it dedicates substantial investment to creating an attractive environment and ‘street scene’ around the properties.
  4. Building through mergers and acquisitions

    • Annington has added value to its asset base through planning, redevelopment and infill development. It has also acquired additional properties to lease to either the MoD or to private tenants as part of its Private Rental Sector (PRS) growth strategy. Annington continues to work with the MoD to find creative solutions to its housing challenges and to look for opportunities to leverage its established management platform.
  5. Lowering the cost of capital to create extra upside

    • The stable government-backed rental cash flow from the leased estate, along with proceeds from the sale of properties released, and Annington’s impressive track record have enabled the business to maintain an appropriate level of leverage.

Status of Investment: The Annington investment is held by the Terra Firma Special Opportunities Fund I and Terra Firma Special Opportunities Fund II. 

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