9th May 2018 11:16
LONDON (Alliance News) - St Modwen Properties PLC, UK-based property investor and developer, said on Wednesday that it has agreed to sell 27% of its retail portfolio at a slight discount to book value.
St Modwen shares were down 0.2% at 413.80 pence per share following the announcement.
The disposal was made in two separate transactions of retailing assets in Birmingham and London. The combined consideration represents a 4% discount to the latest book value of the assets.
The 220,000 square foot Longbridge Shopping Park in Birmingham is one of the assets disposed. Contracts have been arranged for its disposal to Threadneedle Investors on behalf of Zurish Assurance Limited for GBP53.6 million in cash. This reflects a 6.0% initial yield.
Longbridge Shopping Park is part of St. Modwen's GBP1.0 billion Longbridge regeneration project, which is approximately 50% developed. The company intends to focus on bringing forward the remaining developments in the 468 acre site.
Contracts for the disposal of its London asset in Wembley Central, comprised of a 118,000 square foot shopping centre and 86-bed Travelodge also have been exchanged, though it didn't identify the buyer.
Chief Executive Mark Allan said that the disposals were in line with the company's "strategic objective to increase our portfolio focus on assets with better structural growth characteristics and our intention to sell GBP100 million to GBP150 million of retail and small assets during 2018."
"We plan to use the capital we release via these sales to bring forward future phases of Longbridge and accelerate the delivery of our 7.5 million square foot near-term industrial/logistics development pipeline. We intend to retain the majority of the latter for the longer term, which with a yield on incremental capex of circa 9% will deliver a marked income pick-up relative to the average yield on these disposals," Allan added.
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