Regeneration specialist St Modwen has set its sights on city centre development and the private rented sector as it seeks to expand its housebuilding business.
Chief executive Mark Allan said: “We see ourselves increasing our city centre presence.”
He pointed to London, Manchester and Birmingham as focus cities. Allan said: “PRS will feature in all the large-scale residential schemes.”
St Modwen will continue to target the mid market, where Allan said demand is strongest.
He added: “The trend over the next 10, 20, 30 years is around increasing urbanisation and growing population in major cities.”
City centre apartment schemes
In March, St Modwen acquired St Anne’s Court in Digbeth, Birmingham, from administrators for £9m, beating competition from 10 other bids.
Allan said: “We’ve been more focused slightly out of city centres, in the regeneration we’ve done. [St Anne’s Court] is a clear indication that we would like to do more in cities.”
He said St Modwen made the “opportunistic” acquisition with the view to deconstruct part of the half-built scheme and start again. It will look to increase the number of units through a revised planning application and deliver the apartments through its construction arm, targeting the private for-sale market.
Allan added: “That part of Birmingham is fantastic, there’s a huge amount of investment going in around the Bullring and into the wider regeneration in that part of the city.
“There’s a good opportunity in Birmingham; it’s a city we’d like to do more in.”
PRS in the capital
Allan said the housebuilding division will look to add PRS to its sites in London, including future phases at Woolwich, SE18, and New Covent Garden Market in Nine Elms, SW8.
It follows the sale of 200 flats in Uxbridge, west London, to Annington for £75m, in March 2018.
In Nine Elms, St Modwen sold the first 10 acres to R&F and CC Land in 2017 for £470m. After completing construction of the market St Modwen will then begin on a further 10 acres.
Allan said: “PRS will be one of a number of opportunities we look at as part of that site, as that will be a big residential development opportunity that we won’t want to do all by ourselves, and we’re not going to want to do all private for-sale in that part of London.”
The expansion to city centre apartments follows St Modwen’s strategic shift to focus on beds and sheds as it disposes of retail and non-core assets.
In its half-year results, St Modwen revealed it has disposed of £800m of assets in the past 18 months, with a further £143m to be sold over the next two to three years. The portfolio now currently comprises 42% residential land holdings, 39% industrial and logistics, 10% mixed-use regeneration and around 10% non-core assets.
Allan said St Modwen had ploughed profit from the sales back into construction on its existing sites and would look to develop its existing landbank in the immediate future. It will be selective about acquisitions until the economic and political outlook normalises.
To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette
