St Modwen continues disposal strategy with £54m portfolio sale
St Modwen has sold a 1.4m sq ft mixed-use portfolio to property investor Hansteen for £53.7m.
The portfolio of 34 properties is focused on the West Midlands and North West and includes the GE Energy site in Rugby, Tyburn Trading Estate in Birmingham, and Queensway Industrial Estate in Stoke-on-Trent.
St Modwen will receive £47.3m from the deal because some of the assets were held in joint venture. They had a book value of £48.1m in November 2017.
“This disposal is in line with St. Modwen’s strategic objective to refocus our portfolio on fewer, larger assets with a target to sell £150-175m of retail and small assets during 2018,” said Rupert Wood, property director for asset management at St Modwen.
“We have now exchanged contracts to sell £144m of these assets so far this year and, combined with previous disposals, we have now sold £76m of the c.£100m of small assets earmarked for sale when we announced our new strategy just over a year ago.”
St Modwen plans to reinvest the disposal proceeds into its industrial/logistics pipeline which it believes will deliver a significantly higher rental income over the long term.
Hansteen has acquired a portfolio which is let to more then 200 tenants, including Toolstation, Pirelli UK Tyres, Staffordshire County Council and British Steel, and generates annual rent of £5.25m.
It will fund the purchase from current cash resources and a drawdown under its revolving credit facility with the Royal Bank of Scotland.
Morgan Jones and Ian Watson, joint chief executives of Hansteen, added: “This portfolio fits perfectly with our buying criteria. There are a number of asset management opportunities and initiatives across the portfolio which provide us with the opportunity to increase the rent roll and create additional value.”
