29th Jul 2024 13:35
(Alliance News) - Watkin Jones PLC on Monday announced the forward sale of a student accommodation development, in a deal which may inspire confidence in the property developer's outlook.
Watkin Jones said the forward sale of 397-bed purpose-built student accommodation in East London is to Lloyds Banking Group PLC-owned social impact investor Housing Growth Partnership.
The structure of the deal is "innovative" and will generate proceeds of GBP96 million to Watkin Jones "over the course of the three-year development".
"In order to effect this structure, a newly created joint venture, Watkin Jones (Grove Crescent) Holding Ltd has been established, which is owned as to 75% by HGP and 25% by the group," Watkin Jones said.
"Under this arrangement, the group will be responsible for the delivery of the scheme through to completion as well as its ongoing management through Fresh, Watkin Jones' accommodation management business. Funding of the JV entity will be provided by HGP as well as third party debt finance."
Completion of the accommodation is expected in time for the start of the 2026/27 academic year.
Analysts at Davy commented: "The confirmation of a major purpose built student accommodation deal at Watkin Jones might suggest that we have passed an inflection point. The deal should increase confidence in company guidance for this year and add significantly to the order book beyond FY24."
Davy said the order book "should now stand at over GBP300 million".
Watkin Jones shares were 2.8% higher at 54.60 pence each in London on Monday afternoon. Shares have risen 14% over the past 12 months.
By Eric Cunha, Alliance News news editor
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