29th Jul 2024 14:14
(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.
The company 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.
Watkin Jones added that it is not expected that any future sale of the scheme would occur before the final quarter of 2026 due to time needed to complete construction.
Looking ahead, Chief Executive Officer Alex Pease said: "While we remain encouraged by signs that confidence is returning to our residential for rent funding markets, this is tempered by continued uncertainty around the trajectory of interest rate cuts. We, nevertheless, have a number of schemes in the market which are generating good levels of interest."
Watkin Jones shares rose 2.8% to 54.56 pence each on Monday afternoon in London.
By Tom Budszus, Alliance News slot editor
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.