St Modwen sells off more than a quarter of retail property portfolio

Property regeneration specialist St Modwen Properties disposed of two of its retail assets in separate transactions on Wednesday at a combined discount to book value, trimming its retail portfolio by 27% as a result.

The two sales, which are part of management's plan to sell £100-150m of retail assets in 2018 to focus on property with better structural growth potential, were at a combined 4% discount to the latest book value of the assets.

Mark Allan, St Moden's chief executive, said: "We plan to use the capital we release via these sales to bring forward future phases of Longbridge and accelerate the delivery of our 7.5m sq ft near-term industrial/logistics development pipeline.

"We intend to retain the majority of the latter for the longer term, which with a yield on incremental capex of circa 9% will deliver a marked income pick-up relative to the average yield on these disposals."

St Modwen agreed to part ways with the 220,000 square foot Longbridge Shopping Park in Birmingham to Columbia Threadneedle Investments, on behalf of Zurich Assurance, for a cash consideration of £53.6m, reflecting a 6.0% initial yield.

The shopping park forms part of St Modwen's successful £1bn Longbridge regeneration project. St Modwen's flagship long-term scheme is currently approximately 50% developed, leaving the company to focus on bringing forward the "significant development opportunities" that remain on the 468-acre site.

Separately, St Modwen exchanged contracts for the disposal of Wembley Central, made up of a 118,000 square foot shopping centre and an 86-bed Travelodge in north-west London, for an undisclosed price.

As of 0845 BST, shares had moved ahead 0.53% to 416.80p.