Update on Developments

RNS Number : 5352S

Watkin Jones plc

22 December 2016

 

For immediate release

22 December 2016

Watkin Jones plc

('Watkin Jones' or the 'Group')

Update on Developments

Watkin Jones plc (AIM:WJG), a leading UK developer and constructor of multi occupancy property assets, with a focus on the student accommodation sector, is pleased to provide the following update on a number of its developments.

Additional forward sale

The Group announces that it has forward sold the student accommodation element of its Duncan House development in Stratford High Street, E15 to an institutional investor for an undisclosed fee.  This forward sale follows on from the announcement in June 2016 that the Group had received planning consent to progress with the redevelopment of the site.  The proposed redevelopment consists of 511 beds of student accommodation (420 ensuite clusters and 91 self-contained studios); 44 residential dwellings including a proportion of affordable housing in a mix of 1, 2 and 3 bedroom units; a new education facility with 3,150m² gross internal floor area ('GIA'), and 688m² GIA of affordable business workspace.  The residential units and academic floor space that form part of the wider scheme will be sold in separate transactions by Watkin Jones.  The total gross development value of the scheme is in excess of £100million.  Demolition work has started on site and the development is anticipated to be completed in the summer of 2019, ahead of the 2019-2020 academic year.

Planning consents

Watkin Jones also announces that it has received planning consents for three developments, two in Aberdeen and one in Sheffield.  The Aberdeen schemes include the redevelopment of Pittodrie Street, which is in close proximity to Aberdeen University, providing 618 beds of student accommodation and Caledon House, which is situated in a prime location opposite Robert Gordon University and will provide 199 beds of student accommodation (147 ensuite clusters and 52 self-contained studios).  Caledon House is scheduled to be completed in the summer of 2018, ahead of the 2018-19 academic year, whilst the Pittodrie Street development is expected to be completed in the summer of 2019, ahead of the 2019-20 academic year.  The development in Sheffield is located in Rockingham Street, in close proximity to the University of Sheffield, and will provide 543 beds of student accommodation (457 ensuite clusters, 69 self-contained studios and 17 one bed apartments) as well as two commercial units totalling approximately 4,340 square feet.  Rockingham Street is due for delivery in the summer of 2018, ahead of the 2018-19 academic year.

Completed scheme sale

Furthermore, the Group is pleased to announce that its Athena Hall development in Ipswich has now been sold for an undisclosed amount to Arlington Investors Limited ("Arlington").  Situated on the Quayside in Ipswich, Athena Hall services the University of Suffolk and comprises 590 student beds.  Built by Watkin Jones, the development was completed in 2010 and has since been held and operated in a joint venture arrangement.  Athena Hall has been managed by Fresh Student Living Limited ("Fresh"), a wholly owned subsidiary of the Group, and Fresh will continue to manage the asset for Arlington.

Mark Watkin Jones, Chief Executive Officer of Watkin Jones plc, said:  "It is very pleasing to provide such a positive update on a number of our developments, all at different stages of their life cycle.  The planning consents granted for Pittodrie Street and Caledon House are exciting as Aberdeen is an important contributor to the knowledge economy in Scotland, with two universities and approximately 21,000 full time students, and there is a recognised need for purpose built student accommodation in the city.  The redevelopment of Rockingham Street in Sheffield provides us with an opportunity to further extend our reach in this important University city.

"With the forward sale of the student accommodation development at Duncan House now completed we can concentrate on the construction phase of this significant development, which will serve the University of London when completed in the summer of 2019.  We expect the Duncan House development to make an important contribution to our earnings over the next three years.

"The Group's share of net funds from the sale of Athena Hall will add to our cash position and through Fresh we will have the added benefit of continuing to manage the asset going forward."

- Ends -

For further information:

Watkin Jones plc
Mark Watkin Jones, Chief Executive Officer	Tel: [phone]
Phil Byrom, Chief Financial Officer	www.watkinjonesplc.com
Zeus Capital Limited (Nominated Adviser & Joint Broker)
Corporate Finance
Dan Bate / Nick Cowles / Jamie Peel		Tel: [phone]
Corporate Broking		Tel: [phone]
Dominic King / Benjamin Robertson		www.zeuscapital.co.uk
Peel Hunt LLP (Joint Broker)		Tel: [phone]
Mike Bell / Matthew Brooke-Hitching		www.peelhunt.com

Media enquiries:

Buchanan
Henry Harrison-Topham / Richard Oldworth / Jamie Hooper	Tel: [phone]
[e-mail]	www.buchanan.uk.com

Notes to Editors

Watkin Jones is a leading UK developer and constructor of multi occupancy property assets, with a focus on the student accommodation sector.  The Group has strong relationships with institutional investors, and a good reputation for successful, on-time-delivery of high quality developments.  Since 1999, Watkin Jones has delivered over 31,800 student beds across 98 sites, making it a key player and leader in the UK purpose built student accommodation market.  In addition, Watkin Jones has been responsible for over 50 residential developments, ranging from starter homes to executive housing and apartments.

The Group's competitive advantage lies in its experienced management team and business model, which enables it to offer an end to end solution for investors, delivered entirely in-house with minimal reliance on third parties, across the entire life cycle of an asset.  Key components of the business model are:

·     Site identification - extensive experience of site identification and acquisition facilitates high quality sites being acquired;

·     Planning consents - in depth knowledge and experience of the planning consent process specific to this type of asset facilitates high success rates on planning applications;

·     In-house construction and delivery - in-house construction expertise, management and delivery limits reliance on third parties and, together with favourable contractual relationships with key suppliers, enhances control of cost;

·     Funding structure - forward sale model reduces risk for Watkin Jones and provides security and visibility of the asset pipeline for investors.  The Group has strong relationships with blue chip investors, including a number that are repeat investors in Watkin Jones developments; and

·     Asset management - dedicated property management division provides a continued service solution to investors post development completion and completes the 'end to end' business model.

 

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