St Modwen smashes £150m target to reduce retail exposure

Edmonton Green shopping centre

St Modwen has sold retail assets totalling £82m as it accelerates its strategy of weighting its portfolio more heavily towards industrial and logistics development and its housebuilding business.

It had set itself the target of generating £100m-£150m in sales of retail sites in 2018 and the deals announced today has taken it significantly above the top end of its original target.

In May it sold large sites at Longbridge Shopping Park and Wembley Central, reducing its retail portfolio by more than one-quarter.

The Birmingham-based property group has now agreed a deal to sell Edmonton Green shopping centre in north London, which it has owned since 1999. The 495,000 sq ft site, which is 96% let and produces £4m rent a year, has been bought for £72.0m by an affiliate of Crosstree Real Estate Partners.

In addition, St Modwen has completed the sale of two smaller retail assets in Liverpool and Cannock. The two separate transactions totalled £9.9m.

Rupert Wood, property director, asset management at St Modwen, said: “These disposals are in line with our strategic objective to refocus our portfolio towards assets with strong structural growth characteristics. Since the start of this year we have sold £177m of retail assets, on average less than 1% below book value, representing more than half of our overall retail portfolio.”

The strategy, launched last year, refocuses its portfolio on fewer, larger assets that it believes can deliver significantly higher rental income.

Wood added: “Whilst these disposals will reduce our rental income in the near term, recycling the proceeds into our much higher yielding industrial/logistics pipeline is expected to deliver a marked increase in income over time.”

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