(Adds Patron declines to comment)
Nov 1 (Reuters) - China Evergrande Group, China'ssecond-largest property developer, is in "early stage" talks tobuy Cala Homes, a person familiar with the upmarket Britishhousebuilder told Reuters.
Edinburgh, Scotland-based Cala Homes, which is owned byinsurer Legal & General and real estate managers PatronCapital, was being advised on the offer by investment bankLazard, its long-term advisor, the person said.
Sky News, which first reported on the approach, saidEvergrande's offer could be worth close to 700 million pounds.(http://bit.ly/2f8dzLh)
Cala, which builds large, high-end homes across affluentareas of Britain such as around the M25 motorway which circlesLondon, in the Midlands and Scotland, reported revenue of 587.1million pounds for the year ended June 30, 15 percent higherthan a year earlier. Net bank debt stood at 123.9 million poundsat end-June.
In its results statement in October, Cala said it had acontracted land bank with gross development value of 4.7 billionpounds as of end-June and that enquiry levels and reservationrates had risen in the 13 weeks after the EU vote on June 23.
"From time to time we may find ourselves the subject ofspeculation but from our perspective it is very much business asusual," a Cala spokesperson said in an emailed statement.
Legal & General, Patron Capital and Evergrande declined tocomment.
The approach comes as recent mortgage data and statementsfrom housebuilders have indicated that the UK housing market isrecovering somewhat from a sharp downturn in activity thatfollowed Britain's vote to leave the European Union.
The Brexit-induced pound slide has fuelled foreigndemand to invest in the sector, especially from Chinese buyerskeen to diversify away from a slowing home market.
China Vanke confirmed in September thatit had bought a London office property.
For Guangzhou-based Evergrande, one of the most indebtedcompanies in the industry, the purchase of Cala would meanaccess to the UK housing market as developers benefit from achronic supply shortage. Britain launched a 5 billion-poundhomebuilding stimulus package last month.
Evergrande has been aggressively investing in othercompanies as it looks to lift some of the pressure of havingamassed some $57 billion in debt, almost six times its marketvalue, on land acquisitions and corporate mergers. (Reporting by Esha Vaish in Bengaluru, additional reporting byClare Jim in Hong Kong; Editing by Alexandra Hudson)
Legal & General (LGEN)