Watkin Jones rides student housing investor wave
The student accommodation developer is enjoying profit margins of above 20% on new projects and said international funds are entering the investment market as it continues its policy of selling projects as they come forward.
Commenting on his group’s results for the six months to April 2017, Mark Watkin Jones, said: “The group’s student accommodation development business continues to be underpinned by the attractive fundamentals of the student accommodation market, with the group continuing to see strong demand from UK and international clients.
“We have seen increased institutional demand for good quality purpose built assets, with a number of new international funds recently entering the market. This has had a positive effect on development values as competition has increased and yields have sharpened. Clients looking for scale see partnering with Watkin Jones as the best way to secure new assets in prime locations. The forward sale model and student accommodation pipeline of 31 sites provides the group with excellent visibility on future earnings and cash flow.”
Turnover was down 8.4% at £133.7m and pre-tax profit up 26.6% to £21.1m. Turnover is expected to be higher for the second half of the year due to the timing of residential block sales.
Watkin Jones is also moving into the build-to-rent sector and said it had secured an “excellent site” with planning consent in Sutton, London and has identified further site.
The group has its head office in Bangor, North Wales, and listed on the London Stock Exchange in March 2016, priced at 100p. The shares now trade at around 185p.