The property developer St Modwen has reported that it is making “progress” with the sale of Nine Elms Square at New Convent Garden after a buyer dropped out in March, hitting the share price.
In a trading update today the group said that although its net debt was expected to have increased by approximately £85 million in the first half of the year, this was expected to fall in the second half when it hoped to complete the sale of Nine Elms Square.
The ten-acre site in south London has planning permission for 1,900 homes but St Modwen is looking for a buyer at time when demand for luxury apartments has plunged. There are doubts about whether there will be enough demand for the large number of developments in Nine Elms.
In March St Modwen reported that a prospective buyer had walked away from the deal after a period of exclusivity for the potential expired. It was reported that the potential buyer for the £600 million plot of land had been Macrolink Group, a Beijing-based conglomerate new to the London property market.
In other residential activity, St Modwen said it had sold or agreed the sale of 35 acres of land in the past six months, representing 500 homes, for £17 million. The company said that the housebuilding market remained resilient and that sales volumes in the first half were expected to increase by 15 per cent compared with last year.
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The FTSE 250 developer said that rents for its industrial and logistics sites had remained “robust” and that development profits were likely to be in line with expectations.
Mark Allan, the group’s chief executive, said: “Having experienced a positive start to the year that reflects management expectations, we will now continue to refine the strategy further and concentrate on those areas of our deep and diverse portfolio that present genuine opportunities for value generation and further business growth which will ultimately lead to enhanced shareholder returns.”