"Maslow Capital is an excellent partner for Watkin Jones, and their entry into a joint venture with the Group is a great endorsement of our successful track record and extensive experience in residential development and construction"
- Alex Pease - Watkin Jones
Watkin Jones has announced the sale of a new purpose-built student accommodation scheme in Glasgow, known as the Ard, to a newly created joint venture. The entity is owned 95% by Maslow Capital and 5% by Watkin Jones.
The Ard will provide around 784 student beds in a central location close to Glasgow’s main universities. The transaction has a projected gross development value of approximately £182m at completion and will generate secured revenues of about £115m for the group over its three-year construction period. There is also the possibility of further revenue through the eventual sale of the completed property, referred to as the realisation sale.
Watkin Jones will be responsible for delivering the scheme through to completion, with management provided by its accommodation management business, Fresh. Completion is targeted for the start of the 2028/29 academic year.
The transaction is expected to deliver an initial net cash receipt of about £16m, as well as contributing to group revenue and profitability in FY2025. Additional income will be phased during the construction process, and Watkin Jones will also benefit from revenue proportionate to any returns in excess of agreed hurdle rates from a realisation sale. Any such sale is not anticipated before the fourth quarter of 2028.
This agreement marks the company’s first transaction with Maslow Capital. It also demonstrates the group’s ability to expand its funding partnerships at a time of continued volatility in the UK’s residential development and construction sectors. Together with ongoing operational performance, this deal is expected to support Watkin Jones in meeting its financial expectations for FY2025.
“This transaction represents a significant further step for the Group as we seek to diversify our business model and create innovative development funding structures,” said Alex Pease, chief executive officer of Watkin Jones. “Maslow Capital is an excellent partner for Watkin Jones, and their entry into a joint venture with the Group is a great endorsement of our successful track record and extensive experience in residential development and construction.”
For operational purposes, the joint venture will initially have three statutory directors: Alex Pease, chief executive officer, Simon Jones, chief financial officer, and George Dyer, group investment director. As a result, the joint venture will be a related party of the group. The entry into the transaction, including the development, financing, and management agreements between the group and the joint venture, constitutes a related party transaction under Rule 13 of the AIM Rules for Companies.
The independent directors, being all directors other than Alex Pease and Simon Jones, consulted with the company’s nominated adviser, Peel Hunt. They consider the entry into the transaction to be fair and reasonable as far as shareholders are concerned.
