Watkin Jones pleased with trading performance amid broader uncertainty

4th Apr 2019 11:59

(Sharecast News) - Multi-occupancy residential property developer and builder Watkin Jones updated the market on its half-year ended 31 March on Thursday, reporting that it had continued to deliver a "good" trading performance in the period, in line with its expectations.The AIM-traded firm said in student accommodation, it added to its forward-sold development pipeline during the period, reflecting continued strong demand from institutional investors.It highlighted the previously-announced forward sale of a 599-bed student accommodation development in Wembley to the global investor DWS, which was scheduled for delivery ahead of the 2021-2022 academic year.The board said the Wembley scheme represented DWS' first student accommodation acquisition in the UK, which it claimed was reflective of confidence in both Watkin Jones and the UK student accommodation market.The group also exchanged contracts with Brookfield's student accommodation business, Student Roost, for the development of a 245-bed scheme in Swansea, which was scheduled for completion ahead of the 2020-2021 academic year.That represented 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 2019 to 2021," the Watkin Jones board said in its statement."Of these, 11 sites - 5,334 beds - have been forward sold."All of the six schemes - 2,723 beds - under construction for delivery in the 2019 financial year, ahead of the 2019-2020 academic year, are progressing in line with expectations."In its build-to-rent segment, Watkin Jones said investor interest in the "burgeoning" market continued to gain momentum, with the group positioning itself to be a leading developer and manager in the sector, leveraging its experience in purpose built student accommodation. The group said it had 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 said it was now in control of a "high quality, geographically diverse" build-to-rent development pipeline, including three sites with planning - totalling 415 apartments - and three sites totalling around 800 apartments for which planning was being progressed.In addition to its own pipeline of sites, the group was also progressing "well" with the previously-announced development of 315 apartments in Reading for M&G Real Estate, and had started development of the 300-apartment scheme in Wembley for Singaporean investors.On the accommodation management front, the group said its specialist accommodation management business Fresh Property Group was continuing to perform "well", with 15,421 units under management across 56 schemes at the start of the 2019 financial year.By the 2022 financial year, Fresh Property Group was currently appointed to manage 21,018 units across 73 schemes.The group's residential business, meanwhile, had seen a "robust" level of sales activity in the first half of the year, reflecting the relative strength of its primary north west market."The group's continued good trading performance underlines the strength of the Watkin Jones business model, even during times of broader uncertainty," said chief executive officer Richard Simpson."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."Watkin Jones said it would be announcing its half-year results for the period ended 31 March on 21 May.