Henry Boot’s development business has sold a 223,000 sq ft logistics scheme in Preston to Titan Investors for £30m.
The news comes as Henry Boot celebrates its “best year ever”, but says the outlook for 2023 is far less positive.
HBD, alongside Barnfield Group, sold the 18-acre EAST site at a 10% premium to the last reported book value.
The scheme, on the M6 corridor, comprises three fully let buildings alongside a final development plot with consent for a 30,000 sq ft warehouse that will be delivered directly by Titan.
Tracy Clavell-Bate, head of development and acquisitions at Barnfield Group, said: “We knew when the 18-acre site came to the market that it would be in great demand. It has been a very rewarding project to work on from concept master planning, construction, lettings and completing the sale and all within three years.”
Henry Boot CEO, Tim Roberts, said: “EAST has drawn strong interest from potential occupiers since development began on site, demonstrating the continued demand for high-quality Grade A industrial and logistics space in key locations.”
In a trading update ahead of its full year results, which will be issued on March 21, the developer and land promoter said that it had benefited from strong sales within its property development and strategic land businesses.
Roberts said: “Having seen strong sales across the Group, we have had our best year ever at an underlying profit level. Reflecting a particularly challenging backdrop as the year progressed, during which a noteworthy £30m of accretive sales was achieved in a weak market, the year-end valuation movements in our investment portfolio have had an impact on our 2022 profit before tax.”
But this year is likely to be more challenging, he added. “Whilst it’s too early to predict the outturn for 2023 at this stage, the group expects this year to be more challenging than 2022. We remain convinced, however, that in the medium term our three key markets, and the resilience of our business model, will allow us to continue to meet our strategic growth and return ambitions.”
The business has been selective on new projects, with net debt increasing only marginally to £49m from £44m in 2021, remaining at the lower end of its targeted gearing range of 10-20%.
Its land arm, Hallam Land Management, exceeded its strategic target of selling 3,500 plots per annum, largely thanks to a major disposal of 2,170 plots to Taylor Wimpey and Persimmon Homes at Didcot. HLM also secured 21 sites during the year, with the potential to deliver around 6,900 plots, increasing the total land portfolio to 95,407 plots, of which 9,325 plots have planning.
The development arm, HBD, meanwhile completed developments with a GDV of £117m during the year, with HBD’s share rising from £68m in 2021 to £83m. These included five industrial schemes totalling 497,000 sq ft with a combined GDV of £86m, of which HBD’s share was £60m.
Over 92% have been pre-let or pre-sold.
HBD’s committed development programme now stands at £395m, with HBD’s share at £240m. Currently 63% pre-let or pre-sold, with 97% of the development costs fixed.
The group has continued to tactically reduce the value of its investment portfolio, including properties held in JVs, which at the year-end was valued at £106m, down from £126m in 2021.
It added that there was still scope for retaining completed developments to bring the value back to its strategic target of £150m.
