Our central Asset Management team ensures we pro-actively manage our £844 million income producing portfolio to drive rental and capital growth; our current portfolio generates £60 million in annualised gross rental income from over 3,800 tenants.
We have started to rebalance our portfolio towards the industrial and logistics sector where we see greater long-term structural growth, selling our smaller assets and retail assets to reinvest into industrial and logistics development and housebuilding – two of the most attractive sectors in the UK property market.
This year we expect to sell between £100 – £150 million of smaller assets and retail assets, of which £40 million is already under offer. This builds on the good early progress we made in 2017, selling £27 million of small assets.
Reinvesting the proceeds from these sales means we can bring forward our commercial developments and our Asset Management team works closely with the Commercial Development teams to identify the industrial and logistics developments that we should keep for the retained income portfolio. Income-producing assets now make up 51% of our portfolio, up from 45% a year ago.
We will also reinvest the proceeds into bringing forward our residential land and housebuilding developments, firmly placing 90% of our business into strong, long-term growth sectors. This strategy will mark a seismic shift for St. Modwen, driving performance, significantly improving the returns we generate for the business from our retained income portfolio and cementing our future as the UK’s market leader.