DevSec thanks £65m Kirkby sale for reducing impact of slump

Listed property group Development Securities singled out the £65m sale of its Kirkby shopping to Tesco in April for helping to ease the pain of the downturn and trim borrowing, as it reported a resilient set of first half results.

The group, which has numerous assets in the North West from retail and leisure in Blackpool to offices in Manchester city centre, reported a loss after tax for the first six months of 2008 of £14.4m. This compared to a profit after tax of £1.3m for the same period of 2007.

David Jenkins, chairman of DevSec, told the London Stock Exchange today: "The successful disposal of Kirkby Shopping Centre for £65.0m in April has limited the impact of the downturn on our balance sheet as well as reducing the level of net gearing."

Shareholder equity reduced to £213.6m, or 526p a share from £228.9m, 564p a share, at 31 December 2007, representing a decline of 6.7%. Gearing is now at 29% compared to 31% at 31 December 2007. A dividend of 2.40p a share was paid.

DevSec owns a 25% stake in David Topham's Manchester-based developer CTP, which "continued to make progress with their pipeline of projects, focusing on achieving exits via forward sales and fundings. In particular, CTP have seen strong demand for hotel uses on their sites."

In Wigan, DevSec said it had sold the refurbished 159,000 sq ft warehouse and distribution facility at Stonecross Park for a book value of £800,000.

Construction is on schedule for the 147,000 sq ft CityPark office next to Victoria station in Manchester, pre-sold for part owner occupation to the Done brothers' Peninsular Insurance Services in October 2007. The office will sit alongside a 252-room Park Inn Hotel. Both buildings are due to complete in spring 2009.

Of aspirations for a 19-acre residential site in Broughton, Flintshire, DevSec said: "…the Planning Inspector's final report is still anticipated by the end of 2008 although, given the history of slow progress with his review of the emerging unitary development plan, further delay should not be ruled out. We are encouraged that the status of our land is still designated as allocated for residential use in the emerging UDP. Given the clear slowdown in the housing market, we will need to give careful consideration as to how value can best be realised once the UDP has been ratified."

At Broughton Retail Park, the firm is negotiating with British Land over a 171,000 sq ft extension, for which planning consent was obtained in March 2007.

At the former indoor market at Bank Hey Street, Blackpool, the remaining large unit has been handed over to JD Wetherspoon to start trading in the autumn, which will see over 90.0% of the available space being let. Space remains to let in the basement.

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