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New division of Cala out to cash in on north-east housing boom

CALA Homes has announced plans to capitalise on the booming housing market around Aberdeen by spinning out to the north-east of Scotland as a separate trading division.

HIGH HOPES: Cala boss Alan Brown expects the business to double in size by 2017. Picture: Gordon Terris
HIGH HOPES: Cala boss Alan Brown expects the business to double in size by 2017. Picture: Gordon Terris

While Cala has always built houses in the north-east of Scotland, the change means there will be a dedicated operation for the region for the first time since 1996.

The new arm will begin operating on a standalone basis from July this year.

At the moment, Cala runs east and west divisions in Scotland but believes the addition of a third trading entity will help it to improve sales in what is one of Scotland's main property hot spots.

Cala is predicting its turnover from the North East will double to around £60 million by the end of its 2016 financial year as the booming energy sector continues to drive house prices higher in Aberdeen and the surrounding areas.

A study released earlier this week by Lloyds Banking Group found the average house price in Aberdeen rose 94% from £104,288 to £202,120 in the past 10 years - an increase greater than any seen in any other city in Scotland.

Inverness and Dundee were also near to the top of the risers board while Glasgow and Stirling were among the most affordable cities to live.

Hundreds of construction jobs are expected to be supported by the 15 developments Cala expects to bring to the market across the North East before the summer of 2016.

The new division, which will initially employ 15 people, is also planning to move to larger office premises from its current base in Westhill and hire 12 new staff in areas including architects, land managers, surveyors and site managers.

Mike Naysmith, managing director of CALA Homes (North), said: "As well as our in-house roles we estimate 200 construction roles will be needed to bring our growth plans to fruition."

Cala has pencilled in the building of around 200 homes in the North East between July this year and the end of June 2016.

Mr Naysmith indicated the division is looking at further land acquisition across the region but will have the majority of its focus on Aberdeen and popular commuting destinations around the city.

He said: "There is strong demand for new homes in Aberdeen and a lack of availability at the luxury end of the market.

"We have the experience, ambitions and the land bank to meet the needs and the aspirations of the Aberdeen customer and our land buying team is always on the lookout for new opportunities in desirable locations to enhance our growth.

"The next two years will see a period of accelerated growth as we bring on several new developments."

Cala has built more than 400 homes on its Campus development in Aberdeen since launching it in 2007.

Its main live site at the moment is at Rosefield Gardens in the upmarket Cults suburb where prices go up to £835,000 for a detached five-bedroom house.

By May Cala plans to launch two new sites, with one close to the existing Campus development and another to the north of Aberdeen at Dubford.

Other locations in the pipeline include Oldfold Farm, Milltimber and Craibstone.

Cala, which was acquired by Patron Capital Partners and Legal & General Group in March 2013, can trace its roots to the North East having been founded in 1875 as the City of Aberdeen Land Association.

The company's average selling price at the end of January this year was £361,000, an increase of 4.9% from July 2013.

Cala chief executive Alan Brown has previously said the overall business expects to double in size by 2017.

In February, Cala formed two new divisions in England with one looking after counties to the north of London and the other covering regions to the south.

Results from its most recent financial year, covering the 12 months to June 30, 2013, showed a 5% slide in turnover from £253.7m to £240.8m due to reduced revenue from land sales and commercial property disposals. Pre-tax profits after exceptional items were down from £11.4m to £11.1m.

In recent months Cala has repeatedly said it has no plans to join the rush of companies ­looking to list on the London Stock Exchange.

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