TopHat, the leading modular house builder, has raised £70 million from new and existing shareholders as the company draws closer to opening Europe's largest modular housing factory, from which it will manufacture up to 4,000 ultra low-carbon homes a year.
In a major show of confidence in TopHat and the UK's fast-growing modular housing sector, FTSE-100 housebuilder Persimmon and institutional investor Aviva, through its Aviva Capital Partners unit, have each made a substantial investment in the Company.
Existing shareholders Goldman Sachs Asset Management also subscribed to TopHat's latest fundraising round. Homes England, which has funded TopHat's development at Kitchener Barracks in Chatham, continues to explore the potential for additional support as part of its ongoing commitment to the sector.
Persimmon aims to embrace the innovative manufacturing techniques used by TopHat to complement its existing Space4 timber frame product, drive further build efficiencies while expanding its product offering to customers and support moves to meet the Future Homes Standard.
Aviva Capital Partners, Aviva plc's newly launched in-house capital unit which originates infrastructure assets using Aviva group capital, has invested to bolster its sustainable community strategy. Thanks to the quality of TopHat's manufactured homes, outstanding energy performance helps to reduce long-term operating costs for both investors and households, as well as protecting consumers from rising bills.
Homes England's active support during this process was critical to this successful outcome and it remains committed to helping to catalyse this still-nascent sector in order to improve the supply-side economics and sustainability of house building.
Ramping up the delivery of homes will be vital to address chronic housing shortages across the UK, where there is a shortfall of 4.3 million homes according to some estimates. A recent report from the House of Lords' Built Environment Committee suggested modular housing will be instrumental in speeding up development and improving the quality of new-build homes.
This successful fundraise will help to cement TopHat's leadership of the modular homebuilding sector. In addition to its current output of up to 800 homes a year from its first factory in Derby, it will begin production from its cutting-edge 650,000 square feet manufacturing facility in Corby, Northampton in 2024. The new factory will employ 1,000 people, many of whom will be apprentices or employees entering the sector for the first time, working alongside the most advanced house building robots operating at scale in the UK.
Every home that is manufactured along TopHat's production lines is capable of being zero-carbon, meaning no operational emissions are produced from heating and utilities. This is achieved through exceptional building fabric and the incorporation of low-carbon technologies such as solar panels and battery storage. When combined, these efficiencies will help to drastically reduce a home's carbon footprint while helping to cut energy bills, which have reached record-highs over the last year.
Jordan Rosenhaus, CEO and Founder at TopHat, said: "Today's announcement is testament to the innovative approach that TopHat continues to take to house building and marks a step-change for the future of housing. It has been clear for some time that designing and building green, beautiful homes in factories is a critical part of solving the housing crisis – and today's announcement will enable TopHat to reach the scale where the new generation of modular homes can be made available to everyone."
Dean Finch, Group Chief Executive at Persimmon, said: "Persimmon is delighted to announce this partnership, combining the country's most innovative modular manufacturer with the most cost-effective volume house builder.
"This investment provides Persimmon with guaranteed access to very energy-efficient volumetric modular units as well as TopHat's innovative brick façade to use with our Space4 timber frame products. This will provide further build efficiencies, manage the growing challenge of labour shortages in key trades and expand our product range for customers. Combining our complementary industry-leading capabilities alongside other significant new investment makes me excited for the opportunities ahead."
John Cummins, CEO, Aviva Capital Partners, said: "Aviva is using its financial strength to invest in the sustainable infrastructure and real estate which are central to the UK's net zero transition. TopHat is a pioneer of low-carbon homes and this investment will make sustainable housing more widely available, making a difference to communities and providing a retirement income for our customers."
Harry Swales, Chief Investment Officer at Homes England, said: "Modern Methods of Construction have the potential to revolutionise the housing sector, driving greater efficiency and productivity, reducing carbon emissions, decreasing disruption caused by construction and increasing consumer choice.
"As the Government's housing and regeneration agency, we're committed to increasing the use of MMC, and supporting our partners in the sector to invest in it. This investment from TopHat, Persimmon and Aviva Capital is not only an important step forward for TopHat, but really encouraging for the wider sector."
Reducing the UK housing stock's operational emissions is deemed vital if the UK is to meet its legally binding net-zero targets. Energy use in homes currently makes up 23 percent of the UK's greenhouse gas emissions – more than double the amount from agriculture, and nearly as much as all transport emissions.
TopHat is already working with some of the UK's biggest developers and investors, including BoKlok, Man Group and Urban & Civic.
