St Modwen Properties : PRE-CLOSE STATEMENT

Date of issue: 31 May 2016

ST. MODWEN PROPERTIES PLC

('St. Modwen' or the 'Company')

PRE-CLOSE STATEMENT

CONTINUED STRONG UNDERLYING GROWTH

St. Modwen Properties PLC (LSE: SMP), the UK's leading regeneration specialist, today provides a pre-close statement for the period covering 1 December 2015 to 31 May 2016.

Resilient regional portfolio and self-sufficient land bank

The Company is pleased to announce that the business continues to trade well. We continue to extract both short and long-term value-generating opportunities from our extensive land bank, through our asset management activities, remediation, and success in planning and development.

Healthy commercial development pipeline and steady levels of occupier interest

As strong development profits are realised, we continue to add new opportunities to our commercial development pipeline which stands at 1.7m sq ft and comprises a variety of uses in those regions where there is good evidence of occupier take up.

Furthermore, we continue to extract maximum value from our income producing portfolio and we are experiencing steady occupier demand across the UK for new and existing space that we have converted to sales or lettings. Following strong investment activity at the end of 2015, annualised rent roll has grown to £60m and now covers the operating costs of the business which further underlines our strong financial base.

Acquisitions alongside mature asset disposals reinforce long-term growth prospects

The business remains acquisitive across the UK as we seek to build on our robust regional presence with opportunities that provide good income in the short-term as well as greater value creation through longer-term developments.

During the period the majority of acquisitions activity has been focused around the North West region where we have invested in a number of retail and industrial-led opportunities including Crosby Town Centre, Liverpool and Warth Industrial Estate in Bury. We have also signed a number of Development Agreements across the UK, the most recent being to develop 1m sq ft of industrial space at Chippenham, Wiltshire and also with the London Borough of Greenwich for the £200m development of the new Spray Street Quarter in Woolwich and in joint venture with Notting Hill Housing.

At the same time, we have disposed of those assets to which we can no longer add material value, all above book value and including Queensmead Shopping Centre, Farnborough for £16.8m.

Accelerated residential growth

Our housebuilding activities through St. Modwen Homes have stepped up a gear and have overtaken the Persimmon Joint Venture with 14 sites under development and another four expected to start on site during the second half of the year. Overall the housebuilding area of the business remains very profitable, reflecting the strong consumer appetite for housing across the UK, with reservation rates and sales prices currently ahead of targets.

Demand for residential land from third party housebuilders is good and we have agreed or completed site sales in the period for prices at or above book value.

Growth of Private Rented Sector (PRS) activities

We continue to progress our PRS developments through the planning process having recently secured planning permission for a PRS-led development at Leegate, Lewisham for 229 apartments and we expect to start work shortly on 201 PRS apartments on our 110 acre site at St. Andrew's Park, Uxbridge for delivery in 2017/18. Once complete these schemes will reflect a combined Gross Development Value of circa £155m.

Major projects remain on track

The procurement of the market at New Covent Garden Market (NCGM) is now underway, with vacant possession of the 10 acre Nine Elms Square site anticipated for Spring 2017. As outlined in our 2015 full year results, we intend to explore our options to either sell, joint venture or develop this site during 2016. Our other major projects are progressing well with good long-term value creation remaining.

Strong overall business performance

The business continues to perform well with strong underlying trading activity, in line with market expectations.

Bill Oliver, Chief Executive, St. Modwen Properties PLC, said:

'We have experienced a good start to the year as our extensive regional portfolio, commercial development pipeline and housebuilding activities continue to produce real opportunities for growth in terms of Group Net Asset Value which we expect to demonstrate at both the half year and the full year 2016, leading to long-term value creation for our shareholders'.

-ENDS-

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