Apartments builder Watkin Jones aims to raise £100m with AIM float

Student accommodation builder Watkin Jones has announced its plans to raise at least £100m in an AIM flotation as it looks to expand into the private rented sector.

Based in Bangor, north Wales, the company will have a market capitalisation of roughly £255m when it begins trading on 23 March.

With Zeus Capital and Peel Hunt acting as bookrunners and brokers, the property developer aims to raise at least £100m from the sale of existing shares.

Watkins Jones, which expects to pay a total dividend in the year to September of 4p per share under a progressive dividend policy, is expected to have a free float of roughly 50% when it begins trading, a company spokesman said.

The company, founded by the ancestors of current chief executive Mark Watkin Jones, has delivered 28,000 purpose built student accommodation (PBSA) beds at 88 sites since 1999 and has more than 11,300 in its current pipeline.

Ahead of the float, Grenville Turner, former CEO of FTSE 250 estate agent Countrywide, has been appointed as chairman, with Flybe and Assura chairman Simon Laffin also added to the non-executive brains trust.

As well as expansion into private rented flats, the company sees plenty of room still to grow in the PBSA market, which it maintains is it is "increasingly being viewed as a core real estate holding for institutional and international investors".

Last year saw a record level of investment in the sector with in excess of £5bn invested, up 67% on £2.7bn in 2012 with institutions attracted by the attractive yield profile, stable yields and occupancy, low risks and dynamics of the UK university sector.

Watkin Jones claims a competitive advantage lies in an end-to-end business model, from site procurement, though planning application, transaction funding, construction and delivery, to eventual asset management.