St Modwen deep in the red

More big mark-downs on its portfolio sent property developer St Modwen deeper into the red at the half-year, though it reports signs of stability in the residential part of its business. St Modwen posted an interim loss of £98.3m (2008: £20m) in the six months to May largely due to a £68.6m write-off on its investment portfolio.Net asset value fell £80.9m to £321.3m (266p per share), a decline of 20.4% since November 2008. On a pro-forma basis, following the receipt of the proceeds of the recent £107m equity issue, the current net asset value is £422.9m (211p per share).On the commercial property sector, St Modwen expects further reductions in values, principally due to the worsening climate for occupiers, and a consequent slowing of demand for new space, and increasing pressures on rental levels.The residential market is beginning to show early signs of improvement, despite a continued shortage of mortgage finance and a lack of buyers, it says. Sales of residential land to housebuilders are an encouraging sign of a restoration of activity, it added.