Upbeat St Modwen Properties sees demand from retail occupiers
St Modwen Properties today reported full-year results showing a 34% increase in pre-tax profits to £50.4m and 9% growth in NAV. The company issued an upbeat outlook for this year, saying that it had a secure development programme in place with “commercial developments already on site to deliver in excess of £15m profit in 2012”.
The company said its asset management and planning initiatives had been “a particularly valuable attribute in a flat market”. Its strategy is to add “significant long-term value” to its properties – chairman Bill Shannon noted that a substantial proportion of St Modwen’s current development opportunities for this year were being carried out on land that the company had bought more than five years ago.
Despite the challenging economic environment, chief executive Bill Oliver said some good opportunities did exist in the current market. He said few potential tenants for commercial properties had the confidence to make substantial investment, and those that did often expected an attractive deal. “We are, however, seeing increasingly limited competition in this area. There is a general unwillingness to invest in short-term commercial land and there is restricted availability of bank funding for developers”.
Mr. Oliver noted, however, that occupier demand from retailers had continued, particularly for foodstores. The company has two such retail properties in development and “active negotiations or discussions in place for more in future years”, and has also noted wider demand for retail property “in attractive developments”. Mr. Oliver also said that the company was well placed to service demand from occupiers for industrial units or office space through business growth, lease expiry or new location requirements. Its current major development opportunities with planning recognition include a new campus for Swansea University; the regeneration of the Elephant & Castle shopping centre in London, with up to 1,000 residential units; and an 80,000 sq ft foodstore on Great Homer Street together with an additional 50,000 sq ft of retail premises in Liverpool.
