St Modwen Properties reports £32m revaluation write-down

St Modwen, the regeneration specialist, has knocked £32m off the value of its properties and as a result it has unveiled a £20m pre-tax loss in the six months to 31 May.

Interim results published today show turnover of £71m (figure in comparable period last year: £48m).

St Modwen made a pre-tax profit of £54m in the first six months of the previous financial year.

Bill Oliver, chief executive, said: “We are reporting on what has been the most difficult period for the property industry since 1990. Activity levels in the property investment market have continued to decline.

“There remains occupational demand in the commercial sector, although it is patchy, particularly in the retail sector where demand from retailers is weaker, and those in the market are seeking substantial incentives.

“What was not expected, either by us or the market generally, was the pace and severity of the decline in the residential market, which has yet to find a stable level.

“This means that, for residential land, there is currently no genuine market, as the major housebuilders are unwilling to invest in land until they can see the way ahead more clearly. We have taken the decision not to attempt to sell any of our residential land until the market has stabilised.”

Within its landbank hopper, St Modwen has 552ha identified for residential development.

Of these, 383ha have not achieved planning consent for residential use and are carried at existing use valuations. The total book value of these sites is £245m.

The remaining 170ha have residential consent. They add a value of a further £79m.

Acquisitions that have increased the size of St Modwen’s hopper during the six-month period were:

• Coed Darcy – the former BP oil refinery at Llandarcy in South Wales. The plan is to put 4,000 houses on the one third of this massive site that has been judged as having the potential for development
• Sunderland – former ARC glassworks on the edge of the city centre
• Letchworth – former RWE power station
• Daresbury, Warrington – extension to existing campus