St. Modwen Properties plc (LON: SMP) has completed the sale of three retail assets in Doncaster, Crosby and Kirkby for a combined consideration of £34m, representing just over half of the company’s remaining non-core retail portfolio as at May 2019.
The assets were sold via three separate transactions. The aggregate consideration of £34m represents a discount of 9% compared to the May 2019 book value of the three assets.
These disposals follow the sale of £177m of non-core retail assets during 2018 at an average discount to book value of less than 1%. As a result, St. Modwen’s residual non-core retail assets now account for only 2% of its portfolio, down from 16% at the start of 2018.
Mark Allan, CEO of St. Modwen, commented:
“Continuing our targeted approach to capital recycling, proceeds from these latest non-core disposals will be reinvested into our substantial industrial and logistics pipeline, which could deliver over 15m sq ft of new space over time. With a yield on cost of c. 8% and a yield on incremental capex of c. 9%, delivery of this pipeline is expected to drive meaningful development upside and significant growth in income.”