Rental homes sold to global investor for £11m

Watkin Jones, a UK developer and manager of residential and student accommodation, has completed the sale of its three non-core Private Rented Sector (PRS) properties in Sheffield and Manchester.

These have been sold to L1 Capital, an Australian-based global investment manager.

The portfolio comprises over 117,000 sq ft with a total of 174 units, featuring respectively 78 units at Gateway and 43 at Impact, both located in Sheffield and 53 at The Wharf, in Droylsden, Greater Manchester.  

This is Watkin Jones first transaction with L1 Property and marks the exit on assets which were constructed by Watkin Jones between 2006-8 and have been operated by the group since.

The sale will generate an initial net cash inflow of £9m in the fourth quarter of the financial year 2023, and a further £2m deferred payment in the first half of the financial year 2024, after repaying the related debt financing and disposal costs.

The cash proceeds will boost the group’s year-end cash position, as well as supporting its ability to be proactive in the land market.

George Dyer, group investment director at Watkin Jones, said: “We are pleased to undertake our first transaction with L1 Property. 

“The sale of these assets represents the culmination of our business plan and will enable us to recycle  the proceeds into further land opportunities as we look to grow our pipeline in the coming months.” 

David Lamm, chief executive officer of L1 Property said: “We are enthusiastic about this transaction with Watkin Jones to acquire three landmark buildings in Sheffield and Greater Manchester, two cities we recognise for their dynamic economies and promising  long-term prospects.” 

Thomas Collins, chief operating officer of L1 Property, added: “This transaction aligns perfectly with our vision to enhance the living experience, add significant value  through asset management, and continue to develop our fully integrated property management platform.” 

Watkin Jones was advised in the transaction by Savills and Mishcon de Reya.