St Modwen Properties has continued to ramp up development of industrial and logistics assets, as it looks to take advantage of occupier demand in the sector.
In a trading update this morning, the company said it had completed 1.2m sq ft of developments in the sector this year, an increase on the 0.9m sq ft it built last year. It added that it is on target to deliver at least 1.5m sq ft in 2021.
Of the developments completed this year, 78% is already let or under offer, well ahead of the 53% of its 2019 pipeline at the same time last year.
The group has a overall pipeline of developments in the sector of 18m sq ft, which provides it with significant opportunities to further accelerate development beyond 2021. It has already agreed to build a 200,000 sq ft build-to-suit (a development that is built to the tenant’s specification) unit in 2022.
In its housebuilding arm, St Modwen Homes, it has sold 948 units (2019: 1,060). It said the reduction was solely due to the lost production in Spring when it closed its sites during lockdown. Since May the average sales rate has been 0.92.
Completed sales in the second half of the year were up 3% compared to the second half of 2019, and it has seen a 2% improvement in like-for-like pricing since the half year. Its private forward order book is strong at 368 units (£99m), up 53% vs this time last year.
Disposals
Since July, the group has sold or exchanged contracts for the disposal of £96m worth of assets. This includes £20m of non-core assets, comprising 11 small office, PRS, retail and other commercial assets; £50m of residential land; and £26m of industrial and logistics assets. On average, these disposals were in line with their May book value.
This brings disposals for the year to £154m.
Rent collection
Overall rent collection for the final quarter of 2020 is 80%, with industrial and logistics assets seeing 87% received.
For the second and third quarters of the year the group has collected 93% of rents. It has agreed to waive 1% of the overall rent and said it was working closely with tenants to secure the remainder
SMP : St Modwen Properties ramps up logistics development