ST. MODWEN RELEASES £47M OF CAPITAL VIA SALE OF 34 ASSET PORTFOLIO

St. Modwen has exchanged contracts for the disposal of a portfolio of 34 assets to Hansteen Holdings PLC for a total cash consideration of £53.7m. Adjusted for assets held in joint venture,

St. Modwen’s share of the consideration is £47.3m, which compares to a book value for its share of the assets of £48.1m as of November 2017.

The portfolio comprises 1.4m sq ft of lettable space, of which the majority is industrial use, let to over 200 tenants. The assets are predominantly located in the Midlands and North West of England and have an overall vacancy rate of 6.1%. The contracted rental income on the overall portfolio stands at £5.25m. St. Modwen’s share of net rental income received on its share of the assets during 2017 was £2.86m. The disposal is expected to complete shortly.

Rupert Wood, Property Director – Asset Management, St. Modwen, said:

“This disposal is in line with St. Modwen’s strategic objective to refocus our portfolio on fewer, larger assets with a target to sell £150-175m of retail and small assets during 2018. We have now exchanged contracts to sell £144m of these assets so far this year and, combined with previous disposals, we have now sold £76m of the c. £100m of small assets earmarked for sale when we announced our new strategy just over a year ago. As planned, we intend to reinvest the disposal proceeds into our industrial/logistics pipeline which, with a yield on incremental capex of c. 9% and limited operating costs, is expected to deliver a marked pick-up in net rental income over the long term.”