LONDON: Swedish construction group Skanska, one of the biggest building contractors in the world, announced today that it was setting up a UK residential arm.
"There's a huge gap between supply and demand [of homes in Britain]," said Magnus Andersson, who is heading the new venture. Low land values and the ability to recruit good staff were creating a golden opportunity, he said.
Skanska Residential Development, as the new company will be known, will be kept apart from Skanska's UK contracting business, but the construction arm will build all the new homes.
The company will focus on outer London, and places within commuter distance of London. "We are not looking at creating a volume house builder, more a small to medium-sized business," Mr Andersson said.
Skanska bought into the UK construction market when it acquired what used to be Trafalgar House, which until the late 1990s was a big name in UK contracting. Skanska bought the company from Kvaerner in 2000 and is now the ninth-largest contractor in the UK, turning over £1.5bn. The group as a whole turns over £12.5bn.
Housebuilding is a very different business from contracting. Only few UK contractors also do house building, and house builders take a risk on land values in a way that contractors do not.
