CHAP Homes is preparing to embark on the £12.5 million development of the next phase of a major north-east residential complex after concluding a deal to take full ownership of the project.

The Westhill-based firm, part of the CHAP Group, partnered with Bancon Homes in a joint venture to transform the five-hectare site in the exclusive Aberdeen suburb of Milltimber.

CHAP has now bought Bancon’s interest in Woodland Grove and has become the sole developer as construction of the third and fourth blocks of apartments continues. The development, on the site of the former Tor-na-dee hospital, features homes exclusively for buyers aged 55 and over.

The first of those blocks comprises 18 two-bedroom apartments and is due to be completed by the end of August. Seven of those properties have already been sold. The final block to be built will feature 32 two-bedroom apartments.

Douglas Thomson, joint managing director of CHAP Group, said: “We are pleased to have reached an agreement with Bancon Homes. We have worked well in partnership to establish Woodland Grove but both companies feel now is the right time for CHAP Homes to take the project on.

“The deal represents a significant commitment to the north-east housing market and reflects our confidence in the region’s economy. We are investing in a project with a proven track record of strong sales and opportunities for continued success.”

John Irvine, chief executive of the Bancon Group, said: “Bancon Homes has worked well with CHAP and jointly created a quality development at Woodland Grove which we are proud to be associated with. However, as part of our own planned strategy for growth, we intend concentrating on our major new developments including Maidencraig, Banchory and Inverurie and have therefore agreed to pass full ownership of this development to CHAP Homes.”

The Woodland Grove deal follows strong annual results for the CHAP Group, with turnover of £37.43m and pre-tax profits in excess of £1.3m reported for 2013/14. The group also announced earlier this year that it had secured a new £20m banking facility with Santander to support its focus on securing development opportunities and land acquisitions for residential and commercial projects.

Douglas Thomson added: “We outlined our intention to expand our development programme earlier in the year and that strategy remains at the heart of the business plan.

“The Woodland Grove agreement is part of that long term vision and we look forward to the next stage, with an emphasis on innovative design and the highest standards of construction. Sites of this quality are very few and far between and from the outset it was vital that the development matched the location. That has been achieved in the initial phases and the same values will remain at the core of Woodland Grove moving forward.”