St Modwen has completed a strategic and portfolio review and established four objectives that will define the company’s future direction.
The developer’s objectives are
■ accelerate its commercial development activity;
■ expand its residential and housebuilding business;
■ cement and expand its regeneration reputation; and
■ focus on portfolio and capital discipline.
The company said that it was “continuing to progress the sale” of its Nine Elms Square, SW8, project. The scheme has been placed under offer twice this year by Chinese developers Macrolink and Dalian Wanda but exclusivity periods with both have expired. Discussions with the latter are ongoing.
St Modwen has also said that it plans to sell its student accommodation assets at Bay Campus, Swansea University, “to take advantage of the strong investment demand for student housing”.
Industrial and logistics projects comprise 70% of the company’s commercial development pipeline. St Modwen is also active on 16 housebuilding sites across the UK.
In a trading update for the six months to the end of May, the company said it anticipated “continued resilience” in its industrial and logistics income-generating portfolio and its student accommodation assets, “reflecting robust yields and modest rental growth as a result of the strength of ongoing occupier demand in both sectors”.
However, it said it expected “some valuation weakness” in its retail portfolio across 2017 owing to inflation squeezing consumer spending. It added that the residential land market remains healthy, evidenced by ongoing sales activity at or above book value.
Mark Allan, chief executive, said: “Over the past six months we have undertaken a detailed review of the portfolio and the opportunities within our asset base. The outcome of this review has been positive, highlighting the strength and depth of opportunity within the business and portfolio.
“Having experienced a positive start to the year that reflects management expectations, we will now continue to refine the strategy further and concentrate on those areas of our portfolio that present opportunities for value generation.”
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