US military housing

The acquisition of Balfour Beatty Communities (formerly GMH Military Housing) from GMH Communities for $350m in April 2008 was a major step in implementing the Group’s strategy of building a high-quality, domestic business in the US.

Balfour Beatty Communities is the market leader in the development, financing, operation and management of military accommodation PPP projects for the US Departments of the Army, Navy and Air Force.

Congressionally authorised since 1996, the Military Housing Privatisation Initiative allows the Department of Defense and Services to work with the private sector to upgrade the quality of family housing and operate and maintain that housing.

Balfour Beatty Communities performed well in 2008 and in line with expectations at the time of acquisition.

Following the acquisition, three concessions reached financial close in 2008:

In addition, interests were acquired in the Army’s Fort Leonard Wood privatisation project in Pulaski County, Missouri and phases I and II of the 50-year military housing privatisation project at Lackland Air Force Base, located in San Antonio, Texas.

Each concession has a 50-year term, commencing with an initial development period including design and construction, usually carried out by Balfour Beatty Construction US, and overall management, maintenance and operational responsibilities carried out by Balfour Beatty Communities.

By the end of 2008, Balfour Beatty Communities was responsible for 17 military housing privatisation projects covering family housing at 44 military bases and one unaccompanied personnel project.

Looking forward, Balfour Beatty Communities is well-placed to win concessions for more of the remaining military family housing projects, along with unaccompanied military personnel housing schemes currently being piloted.