Property development firm behind Longbridge Town Centre delivers improving returns
St Modwen has released its first half figures for 2019 which show its portfolio value grew to £1.47bn marking an increase of 1.0% adjusted for investments and disposals.
Following more than £800m of disposals over the preceding 18 months, St Modwen’s focus since the start of 2019 has been on reinvestment including £57m in developments (excluding housebuilding activities) and £22m in the acquisition of land for near-term development starts, mostly reflecting the drawdown of land under existing development agreements at Chippenham and Gloucester.
St Modwen agreed the sale of 13 non-core retail and other commercial assets for £18m, £6m of which will complete in the second half of the year, on average slightly below their 2018 book value, and we sold £13m of residential land during the first half year.
Looking forward, the company said it continues to expect the disposal of our residual £143m of non-core assets to be broadly balanced over the next 2-3 years. It said it remains “open to new opportunities in each of our three segments but given the size of the opportunity in our existing pipeline we will remain selective when it comes to acquisitions”.
“We have had a positive first half of 2019 and our expectations for the full year remain unchanged,” said Mark Allan, Chief Executive of St Modwen.
“Following our significant portfolio repositioning last year through the sale of retail and other non-core assets, our focus has now shifted to growth, building on the substantial opportunities we have in our existing portfolio.
“This is reflected in a further increase in housebuilding volumes and industrial and logistics development activity, where the structural growth drivers remain positive despite the ongoing economic uncertainty. We continue to expect the delivery of this strategy to drive a meaningful improvement in return on capital and earnings over time.”
