AVJennings Ltd said on Friday that it is cooking up a deal to sell the company's contract building division to Sekisui House Ltd of Japan for roughly $18.5 million but would retain ownership and continued use of its brandname for further development operations.

The residential specialist said that once the sale has been completed, Sekisui would acquire the right to use the AVJennings brand and other associated trade marks for its contract building operations in return for a cash royalty to be based on the company's income for the first three-year agreement.

AVJennings specialises in project developments which deals in land development, integrated housing and low-rise apartment contracts.

The company also engages in contract building a house for specific customers, where the land identified for house construction has been separately sourced and contracted by the customer.

AVJennings said that its contract building division assets currently cover freehold and leasehold displays, house designs and the right to manage existing construction contracts.

Company chief executive Peter Summers said that their contract building division was specifically targeted by Sekisui House, which currently maintains presence in the Australian property market via its three housing projects in Wentworth Point and Camden Hills in NSW and Ripley Valley in Queensland.

He said that the company's contract division has been gaining traction for the past 12 months though more resources are required to push it further and "the sale of the contract building division now allows AVJennings to fully focus on its core land and integrated housing businesses and the development of residential communities."