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St Modwen sells more than a quarter of its retail portfolio

Property company St Modwen is to sell more than a quarter of its shopping centre portfolio as the British retail sector continues to struggle.
The company is selling a shopping park in Longbridge, Birmingham to Zurich Assurance for ?53.6m. The shops are a central part of a wider ?1bn redevelopment of the area that St Modwen has undertaken over the last few years.
It has also exchanged contracts to sell Wembley Central, a shopping centre in north London which also includes a Travelodge hotel, to an unnamed buyer.
The two properties make up 27pc of St Modwen’s retail holdings, and Mark Allan, chief executive, said selling the assets fitted with a wider intention to concentrate the business on property sectors that are likely to produce better growth, such as warehouses.
It wants to sell ?100m-?150m of retail and smaller properties this year, using the money to fund its development plans, he said.
St Modwen sells more than a quarter of its retail portfolio

Mark Allen, chief executive of St Modwen
“We plan to use the capital we release via these sales to bring forward future phases of Longbridge and accelerate the delivery of our 7.5m sq ft industrial and logistics development pipeline,” he added.
The company plans to hold the majority of the warehouse portfolio for the long term. Industrial property has become popular in recent years because the boom in internet shopping and delivery requirements has pushed rents up, making the buildings more lucrative for landlords.
Meanwhile, figures released by the British Retail Consortium on Wednesday showed that UK retailers saw their worst performance on record in April, with sales shrinking by 3.1pc. Shoppers were increasingly buying goods online and choosing to spend their disposable income on experiences rather than in shops.
Trevor Green, head of UK equities at Aviva Investors, St Modwen's largest shareholder, gave credit to Mr Allan for acting on a strategy he outlined last year.
"The company has performed well since his arrival, but with his strategy starting to clearly play out I believe there is still strong potential for the business," Mr Green added.
However, shares in the company were slightly down this morning at 412.8p, 0.43pc lower.
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