Developer St Modwen hails 'good start' to 2018
West Midlands-based regeneration developer St Modwen Properties has hailed a 'good start' to the year as it builds its portfolio and expands commercial development and housebuilding.
The company, which redeveloped the former Goodyear site in Wolverhampton into a housing estate and is still working on the regeneration of the onetime MG Rover site at Longbridge, has almost reached its target to sell £100m-£150m of assets as the group continued its strategy to reduce its exposure to the retail sector.
In a trading update, chief executive Mark Allan said: "We have had a good start to 2018 and our expectations for full year performance are unchanged.
"Our operational performance remains solid and we have made considerable progress in executing our new, more focused strategy that we launched a year ago.
"Drawing on the significant potential within our existing pipeline, this successful execution is starting to pave the way towards delivering a meaningful improvement in earnings and return on capital in the years ahead."
Last month St Modwen revealed it had exchanged contracts on the £54m sale of Longbridge Shopping Park and of Wembley Central, which together represented 27% of its retail portfolio on average 4% below book value. These followed the sale of the first phase of student housing at Swansea Bay Campus in February for £139m.
In the last year it has sold more than £600m of assets – excluding newly built homes and land transferred to St Modwen Homes – representing 38% of its portfolio a year ago.
At the same time St Modwen is preparing to expand its industrial and logistics development business by up to 25% by 2020, building up sites at Chippenham Gateway at at Gatwick.
It has also seen a 31% rise in sales for St Modwen Homes, with 302 homes sold. It expects sales to rise 25% this year.
The company has recently secured the green light for a new 20,000 sq ft office development at Longbridge, called Devon Way 3, which could create up to 80 jobs.
The offices will be located on Longbridge Technology Park, opposite Longbridge Shopping Park, which is home to the West Midlands’ largest Marks & Spencer.
Construction will commence in the autumn and the offices should be ready for occupation next summer.
