Watkin Jones Plc - Development Update
Watkin Jones plc
Watkin Jones plc (AIM:WJG), a leading UK developer and constructor of multi-occupancy residential property assets, with a focus on the student accommodation and Build to Rent sectors, is pleased to provide the following update on developments in its two core sectors.
Student Accommodation (PBSA)
The Group has exchanged contracts with Europa Generation Student LP for the forward sale of a 197 bed development in Canterbury. The consideration payable to Watkin Jones is £19.6 million, net of client funding costs. The development has planning consent and is scheduled for completion ahead of the 2020/21 academic year. Canterbury is home to three higher education institutions and this development will be Watkin Jones' first development in the city. The scheme is projected to deliver financial returns in line with Group targets and provides further visibility of future earnings. Watkin Jones has previously worked with Europa Generation Student, forward selling a portfolio of six PBSA developments to them in June 2017.
Watkin Jones has secured planning permission on a pipeline PBSA development site in Leicester. The scheme will comprise a twelve storey, 462 bed development made up of 415 clusters beds, 47 studios, amenity space and a commercial unit on the ground floor. The site, which is in close proximity to the City centre and to De Montfort University, is scheduled for completion ahead of the 2021/22 academic year. The Group previously delivered an adjacent PBSA scheme, Merlin Heights, a 601 bed scheme in 2016.
Further to the announcement on 4 April 2019, the Group has now completed the development funding agreement for 245 beds in Swansea with Brookfield's student accommodation business, Student Roost for completion ahead of the 2020/21 academic year.
The Group has also continued to build its PBSA development pipeline, securing a prime site in Exeter close to the city centre. The Group will now seek planning permission for a purpose built student residence for up to 170 beds which is expected to be completed ahead of the 2022/23 academic year.
Build to Rent (BTR)
Watkin Jones has recently secured a site in Brighton & Hove with planning permission for 186 residential units and circa 2,000 square meters of commercial space. The site is situated in a prime location within close proximity to Hove railway station, as well as local retail and leisure amenities. Whilst it benefits from an existing planning consent, Watkin Jones will re-work this consent so that the development is able to become part of the Group's growing Build to Rent development pipeline. The scheme is targeted for delivery in FY 2022.
As mentioned above, the Group has secured planning for a PBSA development in Leicester. In addition to the PBSA aspect, the Group has also secured planning on an adjacent site for a Build to Rent development of 184 units, comprising 31 studios, 101 one-bedroom apartments and 52 two-bedroom apartments, as well as residents' amenity space and car parking over six storeys, which is targeted for delivery in FY 2021.
Richard Simpson, Chief Executive Officer of Watkin Jones, said: "We continue to see positive momentum across all key areas of the business. Our six PBSA schemes for delivery in FY 2019 are on track for completion ahead of the 2019/20 academic year and we continue to see an encouraging pipeline of potential future sites across the UK. The final quarter of the financial year is typically a busy period for the Group in terms of forward sale activity and we expect that to be the case again this year in respect of both the PBSA and Build to Rent pipelines.
Our expertise in acquiring sites at attractive prices, securing planning consent and then forward selling the schemes to a wide range of investors not only validates our business model but also demonstrates that, even in a more complex market, our strategy remains extremely resilient. The sectors in which we operate are highly attractive to investors and we continue to make solid progress against our internal targets."