Developer St Modwen keeps focus inside M25

Developer St Modwen — part-owner of Elephant & Castle’s eyesore shopping centre — says it is training its sights on more buoyant property markets down south this year as the rest of the country struggles.

The group, which last month signed a deal for the overhaul of the New Covent Garden Market in Nine Elms, has a third of its portfolio and 50% of its housing assets in London and the South East, where markets are recovering faster.

The rising worth of St Modwen’s residential holdings accounted for the bulk of the £48 million in valuation gains across its estate during the year to November. Chief executive Bill Oliver said: “People have recognised for quite some time that there is a different kind of economy inside the M25, but outside confidence is low and demand is weak. Our investors and investors in property are preferring to invest in the South-East.”

St Modwen is close to an agreement with Southwark Council for the redevelopment of the Elephant & Castle shopping centre, which it owns with Kuwaiti property firm Sahlia. But the company is still looking for an investor and Oliver said it would be “lucky” to submit a planning application by the end of the year. Net asset values rose 8% to 251p, and the dividend increased 10% to 2.42p.