Watkin Jones Plc - Pre-Close Trading Statement
The Board reports that the Group continues to deliver a good trading performance, in line with its expectations.
The Group added to its forward sold development pipeline, reflecting continued strong demand from institutional investors. Notable highlights include the previously announced forward sale of a 599 bed student accommodation development in Wembley to the global investor DWS, which is scheduled for delivery ahead of the 2021/22 academic year. The Wembley scheme represents DWS' first student accommodation acquisition in the UK, reflecting confidence in both Watkin Jones and the UK student accommodation market.
The Group has also exchanged contracts with Brookfield's student accommodation business, Student Roost, for the development of a 245 bed scheme in Swansea, which is scheduled for completion ahead of the 2020/21 academic year. This represents the third phase in the development of a total of 960 student accommodation beds at the Swansea site, following the success of the first two phases already owned by Student Roost.
Watkin Jones currently has a secured development pipeline in excess of 7,500 beds across 17 sites, which are scheduled for delivery over the period FY19 to FY21. Of these, 11 sites (5,334 beds) have been forward sold. All of the six schemes (2,723 beds) under construction for delivery in FY19, ahead of the 2019/20 academic year, are progressing in line with expectations.
Build to Rent
Investor interest in the burgeoning build to rent market continues to gain momentum and the Group is positioning itself to be a leading developer and manager in this sector, leveraging its experience in purpose built student accommodation.
The Group added significantly to its build to rent development pipeline in the period through the acquisition of a prime site for 336 apartments in Woking and successfully obtained the final planning consent for 166 apartments on its site in Sutton. Watkin Jones is now in control of a high quality, geographically diverse build to rent development pipeline, including three sites with planning (415 apartments) and three sites (circa 800 apartments) for which planning is being progressed.
In addition to its own pipeline of sites, the Group is progressing well with the previously announced development of 315 apartments in Reading for M&G Real Estate and has commenced development of the 300-apartment scheme in Wembley for Singaporean investors.
Fresh Property Group ('FPG'), the Group's specialist accommodation management business, continues to perform well, with 15,421 units under management across 56 schemes at the start of FY19. By FY22, FPG is currently appointed to manage 21,018 units across 73 schemes.
The Group's residential business has seen a robust level of sales activity in the first half of the year, reflecting the relative strength of its primary North West market.
Richard Simpson, Chief Executive Officer of Watkin Jones, said: "The Group's continued good trading performance underlines the strength of the Watkin Jones business model, even during times of broader uncertainty. Leveraging our development and property management expertise into the attractive purpose built student accommodation and build to rent sectors, which are well supported by institutional investor demand, continues to deliver solid returns for the Group and its shareholders. We are making good progress in the financial year and remain confident in the Group's medium term prospects."
Notice of Results
The Group will be announcing its Half Year Results on Tuesday, 21 May 2019. An analyst briefing will be held at 09.30hrs at the offices of Buchanan, 107 Cheapside, London EC2V 6DN.