Good morning, everyone, to Glenveagh's full year results call for 2021. We are pleased to report on the significant progress made by the group during the year. We grew our output by 36% against pre-pandemic levels, and we continue to be well placed to deliver on our ambition of scaling the business to 3,000 units per year. To begin, let's turn to page 4, where we set out our operational highlights, which I will expand on later. As you can see, during the year, we made substantial progress across the three business segments, which provide us great visibility for 2022 and beyond.
Our Suburban segment has successfully delivered 902 units in 2021, and with 1,388 reservations in our forward order book for 2022 and 2023, we were well placed to achieve our target of 1,400 Suburban units for 2022. Our Urban segment has made significant progress as it has completed a forward fund transaction for the Premier Inn hotel, completed the sale of 75 units at Dargan Hall and agreed headline terms with institutional counterparties for two forward funds for over 500 apartments. Our Partnership segment is now a significant business, having successfully secured two landmark agreements for over 2,000 homes with Fingal County Council and Dublin City Council, which further strengthen Glenveagh's unique position to participate in the process outlined in the government's Housing for All plan.
I would also like to highlight the progress made by our three business segments that has been underpinned and supported by our overriding commitment to sustainability, our highly attractive land bank and further supply integrations. Firstly, our strategic response to the areas of most material to our stakeholders, and we have continued to align our governance, management systems and reporting to international sustainability standards in line with stakeholder expectations. Secondly, having added 12 new suburban sites to our portfolio, we have continued to be well positioned to deliver housing to the deepest segments of the market, with 63% of our suburban portfolio priced below EUR 350,000. We have taken two major steps to scale the business sustainably and insulate it against long-term structural changes, investing further in a supply chain and offsite manufacturing capabilities.
Lastly, I would like to emphasize that we remain disciplined in our approach to delivering units in a profitable manner while allocating capital efficiently with a view of enhancing shareholder value. During the year, we have continued to reduce our net euro investment in land, generated significant amounts of cash, and returned over EUR 108 million to shareholders through our share buyback. Let's now turn to page 5, where I would like to reiterate the attractiveness of our suburban segment offering and highlight some important developments in the area. This segment continues to target the deepest demand and value. Its offering is evident through quality of product, affordable purchase price, and the strength of our 2022 order book.
As of today, 73% of our unit target for 2022 has already been reserved, and all sites required to achieve this target are now actively constructing and selling. Despite 6% HPI, 69% of our suburban core units delivered in 2021 have been priced below the median price of a new home in our key locations of the Greater Dublin area and Cork. Delivering much needed housing at this price point is important to Glenveagh's sustainability pillar of putting customers at the heart of what we do and linking our homes to local affordability. Furthermore, in line with our strategy, the suburban segment continues to deliver much needed social and affordable housing for several government supported initiatives. In 2021, 33% of our suburban units have been allocated to social and affordable homes as Glenveagh delivered the first cost rental scheme in the country.
Looking ahead, we are aiming to deliver approximately 230 units for 2022, which is a significant share of the government's 2022 target of 700 cost rentals through approved housing bodies. Excuse me. In 2021, we have established a dedicated customer care support to assist our customers following the completion of their home sale. Excuse me. We have launched our Building Lasting Communities programs to invest and improve in the lives of our residents and the lives of the wider community. Community activities have taken place at schools, sports clubs and local businesses across 12 developments in 2021 since the program was launched. Overall, we are confident that this segment is well positioned to continue delivering flourishing communities across Ireland, where people aspire to live and can afford to do so.
Let's now look at our urban segment, which is on page 6. As you know, the urban segment delivers apartments to institutional investors, and demand in this segment is being driven by shifting lifestyles of millennials and Gen Z. On the top chart, you can see that despite COVID- related challenges, demand from institutional investors continues to be strong. On the other hand, stock available for rent in Ireland has been falling consistently, and the need to improve affordable rental products is becoming even more important. In light of this, we believe that Glenveagh's land bank and our operational capabilities place our urban segment in a favorable position to provide affordable rental product while maximizing the return on our capital. Our urban portfolio consists of around 4,000 units across 11 developments, with over 60% of all units with planning permission in place.
To maximize the return on capital, we will forward fund most of these developments, which will also provide us with long term earnings visibility. To date, Glenveagh has already proven itself a reliable partner of choice for institutional investors as we have successfully delivered units across multiple developments such as Dargan Hall, Marina Village and Herbert Hill. Moreover, we are working to secure a consistent pipeline of deals in this segment, and the team have made significant progress in 2021. The forward fund of the Premier Inn Hotel has successfully progressed and the team has signed heads of terms for two forward fund transactions totaling over 500 urban apartments. Turning to page 7. I would like to provide some further update on one of our Dublin dockland sites.
During 2019 and 2020, we have added significant value to these sites through a series of successful planning applications. In 2021, we monetized the majority of our Castleforbes site through a forward fund of Premier Inn hotel and the sale of the residential and second hotel sites. This accelerated profits from the development and provided capital and resources to invest in other parts of the business, including our share buyback program. The remaining assets in the Docklands portfolio are the office development in Castleforbes, which is due for completion in the first half of 2024, and the 554-unit development at East Road, which the group hopes to monetize in 2022. Turning to page 8.
I would like to conclude the review of our business segments by taking a closer look at the material progress made in our partnership segment. As I previously noted, the group secured two landmark partnership agreements for the proposed development of over 2,000 homes with Fingal County Council and Dublin City Council. This is a significant win for the business, and the two projects will deliver much needed housing in both areas across a mix of social, affordable, private, and cost rental homes. In 2022, we will lodge planning applications for both, and they're looking to commence construction immediately following planning being granted. Given the group's construction capabilities, private market experience, reputation, and strong balance sheet, Glenveagh remains strongly placed to be the supplier of choice for much needed housing across a range of tenures.
From a standing start, this is now a business of significant scale. How we deliver on customer needs across our three segments is as important as what we deliver. In that context, I would like to turn to page nine to explain how our sustainability strategy underpins our overall approach and is a fundamental part of our strategy. Our ambition here is to set out a new benchmark in our sector by delivering the maximum possible social benefit at the lowest possible environmental cost. To ensure that we embedded and fit sustainability throughout the organization, we further strengthened our governance around this agenda during the year. This sees responsibility for sustainability at board, executive, and departmental level, as well as a dedicated sustainability team. We have also integrated our sustainability and climate risks and opportunities into our wider risk management processes.
In 2022, we will further evolve our sustainability approach, including developing a sustainability roadmap for the rest of the decade and publishing our transition to net zero. This will all be informed by our engagement with our key stakeholders. Moving to slide 10. This demonstrates our progress under our six sustainability pillars, which we first set out to our investors in 2020. As part of our commitment to put customers at the heart of what we do, we continue to offer affordability with 69% of our core units in 2021 priced below the median price of new homes sold in the Greater Dublin area and Cork. We have also continued to track our customer satisfaction score, which inform our approach to delivering the best in class customer journey.
We placed significant focus on our management systems in 2021, including in the areas of environmental health and safety and quality, with two ISO accreditations achieved during the year and another on track to be achieved in 2022. As always, this remains our top priority. We also placed considerable emphasis on our people during 2021, and this was particularly relevant given the impact of the pandemic. This included improving engagement and communications with our employees, focusing on employees' well-being, which is vital for the engagement and productivity and a productive workforce and developing our people. In 2021, we saw the launch of our senior leadership development program, which will build a high-performing senior leadership team that can continue to deliver results in a demanding, ever-evolving operating environment.
In terms of climate, our focus on our direct emissions saw reductions here well ahead of our expectations. However, we know that our Scope 3 emissions contain the vast majority of our emissions. Having now measured these, we have commenced the development of our net zero transition plan and will publish this later in the year. Our highly energy efficient homes ensures that emissions from our homes when they are in use remain very low. In 2021, 82% of our homes had an A2 rating, and we estimate that up to 50% of homes will have an A1 rating in 2022. We know that working with our suppliers will be essential to tracking the emissions in our value chain. In 2021, we commenced engagement with our suppliers on this agenda.
We also put in place our vendor code of conduct, which sets out the key social, ethical, and environmental standards that we expect from our suppliers. Finally, we launched our Building Lasting Communities program to invest in local communities where we build and across Ireland. Turning to page 11. We have continued to focus on international standards in the areas of reporting. We have again reported in line with SASB, and we have further evolved our TCFD disclosures. We plan to evolve this further during 2022 and are conscious of forthcoming standards and regulations with respect to reporting sustainability matters. Our progress on sustainability, as well as our increased disclosure, have been recognized by a number of certifications and awards.
These include ISO 14001 for environmental management and ISO 45001 for safety, the Great Place to Work certification, as well as a Silver Investors in Diversity mark. Our progress has also been reflected in our ESG ratings with CDP, MSCI, and Sustainalytics all improving in the last year. Let's now turn to the next section on page 13, where we'd like to provide an update on the operational environment and analysis of our current land bank against this backdrop. I would like to note that Ireland's economy has shown remarkable resilience throughout the COVID-19 pandemic, with GDP growth in 2020 and 2021. Furthermore, the economy is forecast to grow again in 2022, mainly due to a strong multinational sector and a resilient domestic economy.
We are also seeing wage inflation and more people at work than ever before. Mortgage approvals have been strengthening over the past 10 years, yet the housing stock available is at historically low levels, with approximately 11,000 housing units for sale at the end of 2021. Demand is set to remain strong, and this is underpinned by the government's commitment to spend EUR 20 billion by 2026 through the new Housing for All strategy. Let's now turn to page 14 and take a closer look at the recent policies of the Irish government that are aimed at supporting this much needed housing supply. As its overall objective, the Housing for All aims to deliver 300,000 housing units by 2030.
It aims to secure delivery of large scale, sustainable mixed tenure communities through a range of schemes, mainly focused on shared equity, Help to Buy, cost rental, affordable purchase and social housing. This is the largest investment in housing in the history of the state, but the positive effect of policy measures is yet to materially impact housing delivery. The government is set to become a major buyer in the market, and their forecast average spend over the next five years will almost double the market of the PRS spend in 2021. This shows the scale and longevity of the plans. Due to the fundamental differences in product requirements on the market, we do not expect the PRS buyers to be displaced.
Lastly, it is important to note that the volume of judicial reviews has become a major issue with the functionality and effectiveness of the planning system. The planning process needs to be overhauled and the first step is the new LRD system, replacing SHD, creating greater certainty in the planning process. Plenty of challenges remain, particularly with planning policy itself, which now needs to be overhauled. Turning to the next slide, 15. I would like to provide an update on our current land bank and analyze its position against the needs of the market. At the end of 2021, we had 16,800 plots in our land bank during the year. We acquired 12 additional sites with site capacity for 2,700 homes.
Furthermore, our two partnership agreements with local authorities will allow Glenveagh to access over 2,000 units in a capital light manner. In the meantime, we continue to take a disciplined and strategic approach to maximize the value of our land bank. We have continued to reduce the total value in our land bank, which now stands at EUR 563 million. Furthermore, the average plot cost has been reduced to give us greater alignment with our capital management strategy of becoming more capital light and more agile. As you can see from the chart, Glenveagh has assembled a diverse land bank that is well-positioned to deliver at scale across the three business segments.
The broad mix gives us exposure to various end customers such as the private buyers market, including first-time buyers, institutions who invested EUR 2.3 billion last year, and the state which plans to deliver a substantial percentage of the 300,000 units by 2030. Now let's turn to page 16, where I would like to take a closer look at the government's recent Shared Equity scheme in light of our current portfolio. The Shared Equity scheme allows the government to take up to 30% stake in the property, and Help to Buy scheme can be used in conjunction with Shared Equity, but only to a limit of 30% of the property price.
There are regional price caps for shared equity properties, and 76% of units that we hold in Ireland's major cities have optionality for shared equity, and 74% across the entire portfolio, meaning that Glenveagh has very good optionality within the upcoming shared equity scheme. Glenveagh expects its first home sale under the shared equity scheme to take place in the second half of this year. Turning to page 17, we outline another substantial government initiative aligned with Glenveagh's land bank. The government has committed to delivering 18,000 cost rental units by 2030, and this scheme will offer qualifying tenants rents of at least 25% discount to the market.
The scheme allows middle income earners who have been priced out of the rental market due to rising rents an opportunity to rent a reasonable rate while allowing them to maintain a good standard of living. The units will either be bought from the private market or built directly by both approved housing bodies and the LDA. Glenveagh has already delivered 65 units in 2021 and are forecasting a further 230 units in 2022. cost rental complements existing exit options and adds greater long-term resilience to our development portfolio. Let's now turn to the next section on page 19, where I would like to discuss in more detail how our continued investment into the supply chain integration, focus on standardization and innovation in the products we deliver, will allow us to mitigate against inflationary and climate change challenges going forward.
In the second half of 2021, the group saw 6% CPI, and we forecast this trend to continue in 2022. This has been driven largely by global supply chains and the initial signs of the current geopolitical issues. There are also structural challenges such as attracting talent to labor-intensive roles. In order to mitigate these additional costs, Glenveagh has set out on a journey of supply chain integration, innovation, standardization, and off-site manufacturing. Two timber frame facilities in strategic locations will produce 2,000 timber frame units by 2024. This move allows us to control costs further, gives us a platform to innovate and standardize the products, and also feeds into our sustainability strategy. It is an important part of the portfolio as we face into a period of geopolitical turmoil and the potential for further inflation.
Our approach focuses on the rollout of standardized house types with centralized procurement and reduced costs, and increasingly standardized processes from compound setup to health and safety and sustainability. Lastly, our soil recovery facilities add additional benefit during capacity constraints and also allow us to reduce our carbon footprint due to their strategic locations. Turning to page 20, I would like to discuss our manufacturing strategy in more detail. Glenveagh's manufacturing strategy is underpinned by three pillars, which guide our approach. Firstly, we aim to control the critical path items in order to facilitate and secure target delivery. Secondly, we are focused on integrating our manufacturing systems with processes on construction sites so as to increase the speed of delivery and capture efficiency.
Lastly, we are continuously guided by the principles of innovation as we always are looking to explore new methodologies that would allow us to maximize efficiencies. We aim to control the critical path items. Our manufacturing strategy covers all the critical stages of this process, starting from design all the way through to physical on-site delivery. For instance, at design stage, we aim to achieve standardization and streamlining using 3D modeling for seamless integration into the manufacturing software. At production and distribution stage, we are focusing on leveraging innovative technologies such as timber frame, light gauge steel, and other modular technologies, while implementing automated lean and quality control factory processes. During the last two years, we started a phased implementation of our manufacturing strategy. The first phase will see our off-site production expanding incrementally and reaching 2,000 units by 2024.
In the meantime, we are aiming to unlock in-house production capability to reduce risk and explore additional off-site methodologies to find better and more sustainable methods of delivering much needed housing. Let's now turn to the next slide on number 21, where we outline the types of construction methodologies our manufacturing strategy aims to advance. Construction methodologies we consider are based on unit typologies we plan to deliver, site efficiencies we are aiming to achieve, along with additional benefits that are derived. The typology will be derived from the nature of the property and will either use timber frame, light gauge steel, or precast frames.
As you can see, off-site manufacturing leads to greater efficiencies across all unit type, typologies and will be achieved through reduced build times, lower work in progress requirements, lower labor costs on site, as well as lower input costs from controlling the supply chain. Therefore, it is important to us that we are able to derive these benefits from all of our sites throughout the country. Turning to the next slide, 22, we take a closer look at our manufacturing facilities. Glenveagh has two strategically located manufacturing sites. One is located in our suburban north region, which is currently in production and has already produced over 700 units in 2021 and will grow further into 2022. The other facility is located in suburban south region and will become fully operational in 2023.
At scale, both facilities will have enough capacity to deliver over 2,000 units per year, and the locations of these facilities will allow us to service all of our sites efficiently as a nationwide house builder. As part of this process, we are partnering with highly capable teams with significant manufacturing experience and track record. The cost savings associated with off-site manufacturing that I have mentioned in the previous slide have already allowed us to better manage our inflationary environment in 2021, and we are expecting further cost savings in 2022 and beyond. Moving on to the next slide, number 23, I would like to briefly talk about another reason for inflationary pressures in the construction industry globally and what this means for Ireland.
In light of the climate change crisis, we see governments across the world beginning to increase standards for energy efficiency on new builds. It is likely that these higher regulations could bring greater construction costs in the medium term. However, it is important to note that Ireland's energy regulations are one of the highest in Europe, and the cost relating to increasing standards seen in the comparable sections in other jurisdictions are not going to materialize here as they have already been incurred. Ireland's energy regulations are already delivering homes of A2 Building Energy Rating standards, and Glenveagh will only build A1 and A2 rated homes this year.
If we compare the historic less advanced regulations with the current Irish requirements, as you can see, the historic wall is the basic structure, less complex than the Irish wall and has a narrower frame with less energy efficiency. On the other hand, the wall used in Ireland currently is a highly insulated, has air tightness membrane, service zones, and is energy efficient. Such as the advanced design of these walls creates an energy saving for the consumer and is more sustainable long term. Turning to page 24, you can see that this focus on highly energy efficient homes is setting the scene for our pathway towards net zero. We have now mapped out our value chain emissions, and you can see this breakdown in the pie chart. We will use this as a basis for setting out our transition pathway.
At 12%, regulated emissions associated with the house when it is in use, i.e. heating and lighting, make up for a small proportion of the overall emissions, and we see these emissions reduce even further as our homes become more energy efficient. From the chart on the bottom right-hand side, you can see the evolution of the energy performance of our homes with up to 50% expected to be the highest rating of A1 in 2022. However, it is the construction materials that we'll need to focus on our efforts on. In terms of emission reductions, we have already grown the proportion of our homes that are timber frame and manufactured off-site, and we will seek to bring further innovation as we plan our transition plan towards net zero.
Now I'd like to pass you over to Michael, who will discuss the financials for the period.
Thanks, Stephen, and good morning, everyone. As Stephen mentioned, 2021 was a very strong year for the business and this is reflected in the financial performance. It was also a transformative year for the group's capital efficiency strategy with significant improvements made in that regard, and we'll touch on each of those as we work through the slides. Starting with slide 26, the financial summary for the business. We've highlighted a number of key items here from profitability, balance sheets and a cash flow perspective, and we've also provided some financial guidance for 2022 to give greater clarity and visibility on our expectations for this year. I won't dwell on any of these numbers in particular as we go into each category in more detail over the next few slides.
Slide 27 provides the full income statement for 2021. If we start with revenue, which totaled just below EUR 477 million for the year, more than double our revenue in 2020, and it was the business's highest ever revenue results, so you know, very strong overall. There are three main components to revenue in the year. EUR 301 million from the 977 core units with an ASP of EUR 308,000, which demonstrates our continued commitment to the more affordable end of the market. EUR 74 million from the 173 non-core units in Marina Village and Greystones, which you will recall we decided to accelerate our exit of that asset in 2020, so that certainly paid dividends.
EUR 102 million from the Castleforbes site in the Dublin Docklands, reflecting the revenue from their Premier Inn forward fund deal and the sale of the residential and second hotel site. We delivered a gross profit of EUR 83.1 million versus a gross profit last year of EUR 9.5 million. This is obviously a significant improvement and reflects the progress the business has made in the last 12 months. The overall gross margin for the business is 17.4%, but there are a number of components in that. Excluding the non-core Marina Village units, the business generated a gross margin of 19.6%. Again, this probably doesn't reflect the underlying and recurring margins for the business, given the one-off strong profits made in Castleforbes, particularly on the land sales.
We're kind of calling out the suburban margin for 2021 as 17.5%, and we would expect that margin to increase to in excess of 18% for 2022, albeit we need to see how the next few months play out with obviously the fallout from Russia's invasion on Ukraine and how that impacts the overall market. Looking further down the income statement, we generated an operating profit of nearly EUR 51 million, giving an operating margin of 10.6%. This has increased substantially from the operating loss of EUR 12.7 million in 2020.
Dropping right to the bottom of the income statement, we generated an earnings per share of 4.5%, reflecting both the increased profitability for the year as well as the impact from the group's share buyback programs. Moving over to slide 28, which sets out our balance sheet at 31 December 2021. I won't go through the full slides, but as usual, there are a couple of areas that I just want to highlight. Property, plant, and equipment has increased as part of our wider strategy of investing in our supply chain and virtual integration. As Stephen set out, we invested in timber frame and soil recovery facilities in Carlow and Kildare, and we've continued to look at opportunities to expand our manufacturing capabilities going forward.
Our total inventory number has decreased by EUR 54 million to EUR 767 million, with all of this reduction being attributed to land, which is again reflective of our wider strategy to reduce our net investment in land. We reduced our land value from EUR 619 million to EUR 563 million, and we expect this number to reduce further to about EUR 500 million by year-end. The main drivers of this land reduction were Castleforbes transactions, the strong progress made on the non-core assets, particularly Marina Village, and then obviously just our normal unit deliveries in the year.
Our core work in progress is approximately EUR 190 million spread across 24 active selling and/or construction sites, and that gives us an average WIP per site of less than 8 million, which, and you'll have heard us call this out before, you know, that's a very comfortable place for us to be at year-end on our sites. We ended the year in a strong cash position with net cash of EUR 21 million, made up of cash balances of EUR 142 million and debt of EUR 121 million. We ended the year with undrawn debt facilities of EUR 120 million, which leaves us in a great position to look at a number of capital allocation initiatives in 2022.
Moving over to slide 29 and I suppose building on the narrative about reducing our net investment in land while maintaining a relatively similar number of units. As you can see, the downward trajectory has been significant since half year 2019, when we had land of over EUR 700 million and units of slightly more than 13,000, giving us an average unit cost of about EUR 53,000. At the end of this year, we would expect to have that land portfolio down to EUR 500 million, as I said, and we hope to keep that units around the 15,000 mark, and that will give us a unit cost of about EUR 32,000. Which would actually be a 40% reduction from June 2019.
Again, significant progress in that regard. To give you a better sense of the level and scale of the cash being generated by the business, we'll move over to slide 30 and just show kind of the main elements of the cash movements in the year. As you can see, the business generated significant cash inflows. I want to specifically highlight the cash generated from our decisions to accelerate the sale of our non-core units in Marina Village, and also the forward fund and land sales in Castleforbes. These two assets generated over EUR 182 million of inflows for the business, which then allowed us to invest in other areas of the business.
In line with our capital allocation priorities, we invested EUR 94 million on land and deposits for future acquisitions, EUR 281 million in working capital to fund the construction activity and growth on our site, and EUR 17 million on CapEx, and that's mainly related to enhancing our manufacturing capabilities. The share buyback programs were obviously a new aspect of the business in 2021, and we invested EUR 108 million across two separate buybacks in the year. We completed the first EUR 75 million buyback in October, and announced our second buyback of EUR 100 million in November.
To date, we've invested approximately EUR 81 million of the second buyback, and given the progress we've made to date, we're announcing this morning that we're going to extend the buyback program to utilize the remaining share purchase authorization that we got at the EGM in December. As of last Friday, we have a maximum of approximately 25 million available shares to repurchase under the existing permissions, and that's likely to mean the current EUR 100 million euro program will extend to somewhere between EUR 110 million and EUR 115 million in total.
As I said previously, we ended the year in a very strong cash position with net cash of EUR 21 million, which leaves us in a positive position to take advantage of any future activities or future opportunities if they were to arise in 2022. Given the increasing complexity of the business across three different segments, we've included slide 37 to just summarize what we're forecasting the business to be in 2022. In line with our suburban target of 1,400 units, we expect the suburban business to deliver approximately EUR 440 million at an ASP of just shy of EUR 315,000. As I mentioned earlier, we expect some margin progression within the suburban business from 17.5% in 2021 to in excess of 18% in 2022.
As I mentioned, we'll have to monitor the cost aspect of that over the next couple of months and see how the current situation in the Ukraine plays out. The urban business is expected to contribute to revenues and profits across five separate assets, as set out in Stephen's slides, mainly slide 6 of the presentation. We'll have the continuation of our Premier Inn site in Castleforbes, while also hoping to add revenue from the monetization of Castleknock, Citywest, Cluain Mhuire, which is an apartment site in Blackrock in Dublin, and East Road. These assets are forecasted to deliver approximately EUR 190 million of revenue in 2022, and taking our forward fund coupon calls into account, should deliver gross margins of approximately 15%.
Dropping to the bottom of the income statement, our EPS guidance for 2022 is between EUR 0.075 and EUR 0.085, which would deliver significant growth somewhere between 67% and 89% on the 2021 number. This continued profitability growth doesn't impact our balance sheet reduction strategy, and as I mentioned, we plan to reduce our land portfolio to approximately EUR 500 million by the end of 2022, but we'll need to continue to invest in WIP to grow the business, and we expect that number to increase to around EUR 275 million. Finally, on our 2022 guidance, we are setting out an ROE range of between 7% and 8%, and this shows further progression towards our 2024 target of 15%.
Overall, I feel that the business is in really good financial health and working off this strong base, you know, should allow us to continue to drive the business forward in the coming years. With that, I just wanna thank everyone for joining this morning. I look forward to speaking to you over the next couple of weeks, and I'll pass you back to Stephen for his concluding remarks.
Thanks, Michael. To conclude, let's turn to page 33. As you can see, it has been a productive year for everyone in Glenveagh as we've continued to set the foundations for becoming Ireland's leading and most sustainable large scale home builder. To summarize the main points that Michael and I have discussed, firstly, we've continued to grow our revenue and profit in line with the guidance, and we are maintaining our 1,400 unit guidance for our suburban segment, with additional revenues and profits expected from at least three forward funds in 2022. Secondly, we have successfully progressed our off-site manufacturing and supply chain integration strategy, and we continue to explore other off-site methodologies going forward. Lastly, economic and financial efficiencies of our capital has further increased.
As a result, attractive acquisitions and monetization of our urban assets through forward funds, we are expecting our land value to be approximately EUR 500 million by the end of the year, targeting a four- to five-year land portfolio at scale. Overall, the combined result of these favorable developments has already allowed us to improve our profitability and cash flow, increased efficiencies of our balance sheet, and has resulted in greater return on equity. I would also like to note that our progress and ability to maintain and deliver on our original guidance is down to the work of the entire Glenveagh team and our industry partners. I want to thank each and every one of them for their contribution. As a business, we have been moving at pace since 2017, setting up our infrastructure and scaling our business operations.
We have been able to do this because of the commitment, enthusiasm, and professionalism of the entire team we have put together. With that, I'm happy to pass the call over to any questions you may have. Thank you.
Thank you everyone. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You'll then be advised when you can ask your question. Alternatively, you may submit your questions using the Q&A box found underneath the presentation window. Again, it is star one on your telephone keypad to ask a question on today's call. The first question from the phone lines is coming from the line of Dudley Shanley from Goodbody. Dudley, you're unmuted. Now go ahead.
Good morning, Stephen and Michael, and thanks for taking the Q&A. I have three questions, if you don't mind. The first one has to do with urban revenue, which you're guiding at EUR 190 million. It's a little bit higher than we had expected. Can you just talk us through the building blocks as to what builds up to EUR 190 million? The second question is the order book strength, which it's been very, very strong since you updated in January. Specifically on the suburban side, it looks like you've added about 800 units. Is there any bulk deals in there or is it that's just the normal course of business? The third question is manufacturing and the opportunities in front of you.
I guess, how big are these opportunities and how should we think about returns for the business in terms of gross margin uplift? Maybe it's with it coming down, you know, and returns on the investments you're gonna make there. Thank you.
Sure, Dudley. If we can go in reverse, I suppose the detail with the manufacturing side. I think very much the strategy we set out at the start of the process was, in 2017, we realized to deliver scale across the business, we had to standardize the product. I suppose standardization is something that we've talked about for a number of years, but I suppose it's only really now starting to come through the business. You can see the standardized product and the innovative product that we're commencing this year starting to come through. That's, I suppose, where we set up the timber frame operation firstly, and it was to partner up with a reliable partner in Dundalk and see how we could roll that out.
I think the success of that has been our target was to deliver about 750 units within a three-year period. We hit 700 units in the first year, which was a great success. That gave us the ability to go on and then purchase Carlow and set that up. We're now going into the light gauge steel system, so that's the next process that we're moving into. We expect to roll that out in Carlow, probably start in 2022 to start deliveries coming through the system in 2023. That light gauge steel, I suppose for us, will open the door to our, say, our product from around 5.5 meters to about 18 meters. That's where we'll concentrate that delivery. That gives us efficiency.
It removes a lot of labor-intensive from our sites, and it gives us ability to run timber frame and light gauge steel in tandem, particularly on our suburban developments, but also on our partnership sites. The next phase probably to go beyond that then is probably volumetric or 3D. I suppose we've kind of incrementally taken this stage by stage. We've taken the concept, we've proven the capabilities not only to work with people, but also to integrate it into the business and into the software and then progress it from there. I think what you'll see over the next number of years, incrementally we'll just keep integrating this into the business.
I suppose the long-term goal for us is where we think things going is that it's not that the manufacturing is today, it's two, three, four years down the road. That's when it really the cost savings come into account. As the standardized costs keep moving up, the manufacturing comes to the fore. Once one's past the other out, that's when you're really on the, I suppose on the winning front. We've always spoken, when the industry is probably seeing 5% or 6% inflation, we would hope with these technologies and methodologies, you know, we can control our costs at 2%-3%. I suppose that's where we're leaning towards. We also realize, look, if you look at the construction industry, post-pandemic or pre-pandemic, there was 147,000 people in the industry.
If you look at the latest CSO data up to about the third quarter of 2021, we've 127,000. 20,000 peoples have been lost in the industry. We need to change the ways we do things because if we're to scale, you know, the government wants us to increase output by almost 100% when we get to that 2030 number. We need to find new ways to deliver housing. I suppose manufacturing, we feel particularly being at the scale of Glenveagh, we can deliver it. On the order book for 2022, it's obviously made up of 2022 and 2023. You're correct and right. We've seen 800 units come through the system. We've seen very strong demand on our private buyers. Actually quite limited.
We've only about 400 units now to sell between now and probably the end of June is where we see things. As we called out in my remarks, about 230 unit cost rental units are coming through the system already. That's adding to the order book there at this moment in time. That's the only books that we've seen in the system, but we see very strong robust demand across the business at this moment in time, particularly for the products we're delivering. Michael, if you want to elaborate.
Yeah. Just on the makeup of the 190, Dudley. We obviously and I think I referenced slide 6 as being kind of where you'll pick up the information. There's the continuation of the Premier Inn deal. That's the forward fund with Union. That we'll have 12 months of development revenue coming through on that development. There's obviously the two heads of terms for 500 units being Citywest and Castleknock. Hopefully get those across the line in kind of late H1 probably. You'll have the land sale up front, and then you'll have the development revenue of probably five to six months there. You know, that's obviously again, in line with how we're accounting for forward funds.
The final two deals that we're calling out are Cluain Mhuire, which I said is Blackrock in Dublin, and East Road.
You know, likely to be H2 deals and probably late H2. We'll probably get our lands elements from those two deals and a little bit of development revenue, but not a huge amount. That's what's making up the EUR 190.
That's great. Thanks, gentlemen.
Thanks, Dudley Shanley.
Thank you so much for your question. The next question from the phone line is coming from the line of Colin Sheridan from Davy. You're now unmuted, and now go ahead.
Hi. Good morning, guys. Congratulations on the results.
Thanks, Colin.
Just a few from me if I can. Maybe start just by talking a little bit more about the build cost inflation environment, how that sort of split out materials versus labor. I know you've referred to what's going on in Eastern Europe at the moment on a couple of occasions. I just wonder whether you've seen any signs of threats to the supply chain emerge at this point in time, or are we really just talking about an inflationary story at this point in time? Secondly, on ESG, actually, I mean, you guys have obviously been focused on sustainability for a while now, going back to at least your capital markets day in early 2020. I suppose Stephen spoke about the upgrades to ratings this year.
I just wonder what the actual catalysts have been for those upgrades over the course of the year. I suppose on final question on ASP. You point to the ASP maybe moving towards 275 by the end of the year. Just wondering, given that sort of EUR 8 million price that you're talking about, what kind of run rate of volumes do you think is sustainable at 275? I'm just trying to get a feel for when the company starts to sort of get towards 3,000 units, what level of ASP might be required there. Thanks.
Thanks, Colin. Yeah, just on the CPI and what we're seeing, I suppose you gotta look backwards at 2021. It was a lot of supply chain constraints. It was obviously crude oil prices moving up dramatically, which fed into logistics, freight costs. I suppose if I take the weighting in 2021, the majority of it was on the material side, and we would always say the materials, depending on the topography of the product or the typology of the product, excuse me, make up probably 40%-45%, depending on the unit type. That was heavily weighted towards the material side. You know, we've seen shortages in resin. We obviously seen the lumber issue earlier in the year, but it fed across a number of components, and it was predominantly on the material side.
Are we seeing anything at the moment from the Ukrainian crisis? Not exactly, but I suppose we're all very much aware of, you know, oil prices, where they've gone in the last week alone, you know, up 20%+. We're hearing already that there may be issues with some supply chains coming from Eastern Europe. The likes of glass could be an issue, the likes of resin could be an issue. There may be obviously Russia is a timber exporter as well. So we've got to look for all of those and just keep an eye out on it. We had hoped that the supply chain would evolve into a much better place because there was a lot of stress in the system towards the back end of the year.
Very much, if you think about the way that Ireland operated in 2021, we were locked down for the best part of three and a half months. We opened up. There was a natural shortage on day one because everyone was literally digging out of the ground. So concrete blocks, all of those were issues at that point in time. But as we delivered throughout the year, it became into the secondary phase of that it was the components to finish the homes. It was from paint to sanitary ware to tiles to et cetera, et cetera. Those issues compounded as we went through the back end of the year. There was a lot of issues with supply chains from China, internal doors and things like that. So freight was a big thing last year.
We definitely seen that. I suppose we would hope that that would evolve as the year went on. I suppose with the way things are, our view at the moment is it's prudent to hold the 6%. It's crude oil now is going to be the issue because I suppose for the haulers, the logistics, how that feeds into their cost going forward. We just got to keep a very close eye on it. On the sustainability, absolutely. I suppose the big thing for us is obviously the reporting. You know, we did an awful lot of work in the last number of years.
I suppose last year we really kind of called out the reports on our supply chain emissions and detailing the risks and opportunities that the business faced and looked over the next 10 years. I suppose the other big thing was we enhanced our governance. We set up a dedicated board committee, apologies, for this to monitor. It went from not only board to executive, down to departmental. I suppose it's all about reporting and bringing those reports. I think that's very much what the rating agencies picked up last year, was the amount of reporting we did. I suppose what it does for the business now, it makes it accountable. We've kind of said, "This is where we are.
This is our path forward, and we can be held to account for it." I think that's very much what the rating agency recognized. I think the first stage of all this is exactly where do you stand and how you report, and then it's from there that you show your pathway forward, and I think that's what we were probably recognized for last year.
On the width, so the 275, you'll be aware we're obviously building out the office developments down in Castleforbes alongside the Premier Inn. That'll obviously sit on our own balance sheet for another while. There'll probably be the good EUR 30 million sitting on the balance sheet by the end of this year in relation to the office.
If you strip that out, you're back to about 245 of kind of, let's call it core width. Not wanting to revisit core versus non-core, but it's probably suburban width of 245.
You then kind of look out and obviously the office drops away in the next couple of years and we continue to grow. I think that 275 is probably going to, for the want of a better phrase, probably flatline over the kind of 2023 and into 2024 as the office drops away and gets replaced by new sites to get up towards that 3,000 units. I suppose we've been consistent for a couple of years and talked about that EUR 8 million multiplied by the kind of number of sites that we have open.
To deliver the 3,000 units, you're probably up to the kind of mid-30s in terms of construction sites and obviously that across the kind of EUR 8 million per site will get you to kind of the high 200s close to EUR 300 million of WIP. As I said, we'll be there at the end of 2022, albeit it'll have the office in there, and the office will drop away and get replaced by kind of other suburban/urban sites.
It's really clear. Thanks, guys.
Thanks, Colin.
Thank you for your question, Colin. As another reminder, it is star one on your telephone's keypad to register for a question. The next question in the queue is coming from the line of Emily Vidal from Credit Suisse. Your line is now unmuted, ma'am. Now go ahead.
Morning, guys. I hope you're well, and thanks for taking my questions. I've got two, please. Just firstly on the sort of evolution of the order book this year, just conscious that you're pretty far forward sold already, so how should we think about this for this year? Are you now at a point where you should sort of think about launches coming through slightly later and sort of scope for capturing a bit more price and therefore sort of you don't necessarily see the order book kick up next time we sort of hear from you in a couple of months' time and you're looking more to sort of the balance of price rather than volume? Then secondly, just coming back on this, the point on work in progress.
As we look at that EUR 8 million today that you sort of think is sustainable, is that effectively because if we look at the EUR 8 million today, is there already some variance in that, like where you're bringing more timber frame through, is the sort of average meaningfully lower and sort of, you know, what's the range in that EUR 8 million at the moment? Thanks very much.
Sure, Emily. On the order book, yeah, I suppose it obviously has moved up substantially since we last reported. Obviously our next reporting will probably be AGM at the end of April. I roughly, as I called out, we've about 73% of our suburban target for this year already locked down. I would see that filling out over the next four months into the end of June. We ideally would like to have all our units for 2022 in place by the end of June, and we don't see any issue. Absolutely, we are pushing on pricing, and we are trying to capture what we think is realistic out there. And you're seeing that progress through the margin progression. There is a strong demand out there.
You've obviously seen a number of government initiatives in the Housing for All document that really isn't material affecting anything out there at the moment. The only real product that's operating at the moment is the cost rental unit, and it's in a very small amount, but you should see that ramp up over the next 12 months. We see a very strong demand out there. We will probably try and fill the order book out for this year, and then probably from the late summer of this year, start working on our 2023. We also already have a quantum of that already in place through a number of initiatives that we're working on with, you know, between social housing and cost rental units for that year.
Yeah, it's progressing really well, but we're also conscious of, you know, the big thing for us is getting the business to scale. You know, looking at the business delivering 1,150 units, I suppose our ambition is to get the business to 3,000 units as quickly. Get all the strategies and synergies working together, and then you get a true outlook of where the business can truly go.
On the WIP, Emily, I suppose the range of that kind of average of EUR 8 million. You've got some of our larger sites that, you know, are generating well in excess of 100 units per year. They're probably up around the EUR 13 million to EUR 14 million mark.
You've just naturally got some smaller sites that are kind of down around the kind of EUR 5 million to EUR 6 million mark. Your point on the timber frame is well made and one of the benefits of our manufacturing capability comes down to kind of asset turn and being able to turn the sites quicker and obviously if we can turn them quicker, you know, implement just in time around our sites, then all of that is going to kind of improve our timber frame or sorry, improve our efficiencies on site and therefore our WIP. There's certainly scope to tighten in the WIP number.
As I said to Colin, you know, we think that's probably going to flatline around the 275-300 mark, even when we get up to 3,000 units. I suppose that just kind of ties in with our overall kind of balance sheet strategy and trying to kind of keep a lean balance sheet both from a land and a WIP perspective. Even on the partnerships business, when they come in, they're not going to be significantly different from a suburban site. You'll have the urban stuff that's forward funded, and we won't carry any WIP there. You'll have suburban around the EUR 8 million mark, and then you'll have a couple of partnership deals that'll be, you know, probably EUR 12 million to EUR 15 million of WIP.
All very manageable.
Great. Thanks, guys.
Thanks, Emily. Take care.
Thank you so much for your questions everyone, and I would like to hand you back over to Stephen to conclude today's call.
Thanks everyone for participating this morning. We'll be on the road over the next number of days and look forward to catching up with you. In the interim, stay safe and keep well. Thank you.
Thank you everyone for joining us for today's call. You may now disconnect your handsets. Thanks for connecting.