Propertyfirm backin black

THE REGENERATION specialist behind a multi-million pound housing scheme in Darlington has swung back into the black as it recorded its first full-year profit in three years.

THE REGENERATION specialist behind a multi-million pound housing scheme in Darlington has swung back into the black as it recorded its first full-year profit in three years.

St Modwen Properties turned a £119.4m loss in 2009 into a pre-tax profit of £37.5m in the year to November 30, 2010.

The improvement was attributed to a near trebling of profits from the sale of property, from £7.6m to £21.9m, and a reduction in occupancy levels from 17% to 12%.

The Birmingham-based firm also reported a £23m rise in the value of its properties, as the price of residential land regained some of its former value.

The company said it had a “strong pipeline” of developments including a venture with Persimmon to build 2,000 homes - including 250 on the former Corus site in Whessoe Road, Darlington.

The scheme will include a mix of two, three and four-bedroom family homes and one and two-bedroom apartments.

Construction work is due to start this year, with the first batch of homes ready for occupation next year. The company said the scheme highlighted rising levels of confidence in the residential property market.

Stephen Prosser, North-east and Yorkshire regional director at St Modwen, said: “The housing market is often one of the first to go into recession and the first to come out again. The phones have been ringing more frequently, which tells us that demand is returning.”

He said the same bounce-back had not been felt in the commercial property market.

The company has put on hold plans for a £50m industrial park at Faverdale near Darlington. Aimed at large-scale manufacturers and distribution firms, the scheme would provide up to 1.2m sq ft of space and create 1,500 jobs.

But Mr Prosser maintained the development had been postponed rather than shelved altogether.

“Sadly the demand and interest has been affected by the downturn. The scheme would entail significant service and infrastructure costs.

“If there was significant end user demand then that scheme would go live again.”

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