SMP.L Regulatory News (SMP)

Date of issue: 9 May 2018

ST. MODWEN PROPERTIES PLC

("St. Modwen" or the "Company")

ST. MODWEN AGREES SALE OF 27% OF RETAIL PORTFOLIO

St. Modwen has agreed the disposal of two retail assets in Longbridge, Birmingham and Wembley, London via two separate transactions. The two assets made up 27% of the Company's retail property portfolio by value as of November 2017. On average, the combined consideration marks a 4% discount to the latest book value of the assets.

Firstly, St. Modwen has exchanged contracts for the disposal of the 220,000 sq ft Longbridge Shopping Park in Birmingham to Columbia Threadneedle Investments on behalf of Zurich Assurance Limited for a cash consideration of £53.6 million, reflecting a 6.0% initial yield. The Shopping Park includes a 150,000 sq ft Marks & Spencer, with further units let to a range of occupiers, including Smyths Toys, Boots, Poundland, Mountain Warehouse, Holland & Barrett, Carphone Warehouse and Specsavers. The Shopping Park forms part of St. Modwen's successful £1bn Longbridge regeneration project. This flagship long-term scheme is currently approximately 50% developed, and the Company will now focus on bringing forward the significant development opportunities that remain on the 468-acre site.

Secondly, the Company has exchanged contracts for the disposal of Wembley Central in London, which comprises an 118,000 sq ft shopping centre and 86-bed Travelodge.

Mark Allan, Chief Executive, St. Modwen, said: 

"These disposals are in line with our strategic objective to increase our portfolio focus on assets with better structural growth characteristics and our intention to sell £100-150 million of retail and small assets during 2018. We plan to use the capital we release via these sales to bring forward future phases of Longbridge and accelerate the delivery of our 7.5 million 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."

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For Further information, please contact:

LEI: 213800WMV4WVES8TQH05

Notes to Editors

Longbridge Shopping Park: the assets subject to this transaction form part of the retail development of St. Modwen's £1bn Longbridge regeneration project, which is aimed at delivering 1.3 million sq ft of mixed-use space and over 2,000 new homes across the 468-acre site. The book value of the gross assets subject of the transaction was £58.0 million as at 30 November 2017 and the assets produced £2.1 million of net rental income during 2017.

St. Modwen Properties PLC: St. Modwen operates across the full spectrum of the property industry from a network of regional offices, a residential business and through joint ventures with public sector and industry leading partners. The Company has an outstanding 30-year track record of adding value by managing schemes through the planning and infrastructure process and active asset management and development. With extensive experience in dealing with complex and challenging sites, St. Modwen has a land bank of 6,000 developable acres and is focused on the long-term development of commercial property and residential land. St. Modwen's £1.7bn national portfolio of over 100 projects includes; the regeneration of New Covent Garden Market, London; the transformation of Longbridge, Birmingham and the on-going regeneration of over 2,500 acres of former industrial land in South Wales which includes the delivery of the first phase of Swansea University's £450m Bay Campus.