Property group reaches 95% of disposal target

St Modwen believes it has put the foundations in place for “a meaningful improvement” in earnings in the years ahead after rolling out a significant shift in strategy.

The property group has “continued to shift our portfolio towards assets with the strongest structural growth prospects” – selling retail and buying industrial.

It sold big sites at Longbridge Shopping Park and Wembley Central last month, which together were more than one-quarter of its retail portfolio.

Along with a smaller disposal in Liverpool, the group is around 95% to the lower end of its target to sell £100-150m of retail and small assets during this calendar year.

The group has “had a good start to 2018”, according to chief executive Mark Allan.

He said: “Our operational performance remains solid and we have made considerable progress in executing our new, more focused strategy that we launched a year ago.

“Drawing on the significant potential within our existing pipeline, this successful execution is starting to pave the way towards delivering a meaningful improvement in earnings and return on capital in the years ahead.”

Its sales, which also included the £139m sale in February of a student development in Swansea, are funding investment while keeping borrowings “firmly under control”.

St Modwen plans to increase its industrial and logistics development activity by up to 25% per year by 2020. It has made good progress on sites at Chippenham Gateway and Gatwick, which together have a potential estimated rental value of more than £8m.

It is also focused on its residential and housebuilding business and it believes the regional market “has remained robust”. It expects growth of “up to 25%” in sales volumes this year, in line with its target.