Two new sites boost forward visibility
Watkin Jones provides the end-to-end development and management of large scale, multi occupancy accommodation, focusing on purpose built student accommodation (PBSA) and residential build to rent (BTR).The UK’s 67m population is growing at a healthy 1% pa clip, albeit there was a slight dip in the birth rate at the turn of the Millennium. Leading this year to a 3% fall in the number of 18 year olds, and a 1.9% decline in British students accepting places at University (UCAS). Offset partially by a 3%-4% increase in overseas applications, leaving the total 2018/19 freshers’ intake very marginally lower (-1.1%) at c. 530k.
But the good news is that this trend is set to reverse strongly between 2021-31, and students are trading up, particularly in their 2nd and 3rd years when typically forced into lower quality digs.
Yesterday Watkin Jones said that it had exchanged contracts on a new 599 bed site with planning consent in Wembley (London) from Kelaty Propco Limited for an undisclosed fee. The project is scheduled for completion at the start of the 2021/22 academic year – adding approx 20% to that period’s output, and ~6% to the entire >10,000 unit pipeline.
But that’s not all. Elsewhere, Watkin Jones is leveraging its expertise in the expanding Build-to-Rent sector (BTR), where it further announced yesterday a new development agreement relating to a 300 apartment scheme on adjacent land with the same vendor. This time construction is set to finish in Mar’21 - lifting the pipeline by >18% to 1,900+
Consequently, we make no change to our projections or 230p/share valuation. Reiterating too, that the business deserves its premium rating vs peers, reflecting the superior growth, asset turns, lower risk and cashflows generated.
Inland Homes is engaged in land regeneration business, focusing on developing sites in the south and south east of England. The principal activity of Co. is to acquire residential and mixed use sites and planning consent for development. Co. develops a number of the plots for private sale and sells consented plots to housebuilders.
Springfield Properties is engaged in developing a mix of private and affordable housing in Scotland. Co. operates through two divisions: Private Housing and Affordable. The Private Housing division develops smaller to medium sized developments in Scotland, as well as a small number of larger sites. The Affordable division's operations focus on the development of land into stand-alone sites which consist entirely of affordable homes.
Telford Homes is a developer of residential-led, mixed use sites in London. Co.'s customers include individual investors from the U.K. and overseas, owner-occupiers and housing associations. Co. is working with institutional investors in the build to rent sector. Co. has only one reportable segment being housebuilding in the U.K.
Watkin Jones is a holding company. Through its subsidiaries, Co. is engaged in the property development and the management of properties for multiple residential occupation. Co. operates in the following segments: student accommodation, which is engaged in the development of purpose built student accommodation; build to rent, which is engaged in the development of build to rent accommodation; residential, which is engaged in the development of residential property; and accommodation management, which is engaged in the management of student accommodation and build to rent property.
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