‘Well-positioned’ St Modwen shows resilience

Developer St Modwen says it is working closely with its client across all sectors as it reports that recent trading has been ahead of expectations.

In Industrial & Logistics, St Modwen says occupier interest has “remained resilient” and even though it has seen, as expected, some delays in construction and leasing, the firm has made “good progress” in leasing up its recent and committed developments. As a result, our 2019 completions are now 74% let or under offer (Feb 2020: 58%) and our 2020 pipeline is 53% let or under offer (Feb 2020: 18%), with around half of these new letting deals agreed during lockdown. In its existing portfolio, St Modwen says it has so far received 94% of the £5.4m rent due in March, April and May. The company have agreed to waive 1% of the rent and is “working closely” with its customers on reaching a solution for the remainder.

In St Modwen Homes, sales were tracking ahead of plan before the firm decided to close its sites on 24 March. In line with Government guidelines, work restarted on sites in the middle of May and sales centres at its 22 sales-active sites have since reopened, but the delay in production means that 280 completed unit sales for the half year were down 32% vs last year (H1 2019: 411 units). St Modwen says customer demand so far has “remained resilient”, with overall private sales for the year to date, including units which are exchanged and reserved, down less than 5% vs this time last year.

In Strategic Land & Regeneration, St Modwen’s residual non-core retail and two retail regeneration assets have, as expected, been “significantly impacted” by the mandatory closing of non-essential shops. To date, we the firm has received 61% of the £4m rent due in March, April and May, taking the overall rent received for the Group over that period to 80%. The company has agreed to move to monthly payments on 1% of SL&R rent, waive 6%, defer 10% and continues to work closely with its customers with regard to the remaining element.

Rob Hudson, interim chief executive, said: “We are pleased to have been able to restart activity on our sites safely and strengthen our liquidity and financial position, but the current economic disruption will inevitably have an impact on our financial results in the short term, as the pandemic continues to cause significant social and economic challenges. Whilst near-term visibility remains low, recent trading has been ahead of our expectations and the long term structural growth drivers in our two key markets, residential and industrial/logistics, remain positive, so our strong financial base leaves us well positioned for the future.”