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Bargain Shares: Targeting value plays

A property vulture fund is set to realise material value from its flagship Nottingham site and a currency manager offers high earnings growth and a high dividend yield.
Bargain Shares: Targeting value plays

I have been playing student housing and build-to-rent themes through leading sector play Watkin Jones (WJG:246p), a developer specialising in purpose-built student accommodation (PBSA) and build-to-rent (BTR) housing.

A strong recovery in investor confidence following last year’s Covid-19 induced market softness, coupled with an undersupply of housing are highly supportive of institutional demand in both sub-sectors. International students heading to UK universities have bounced back, too, while anyone trying to rent a flat in the private sector will have seen rents surge in the past year.

This is good news for property company Conygar (CIC: 157p) which is looking to start construction work early next year on a 702-bed student accommodation scheme on one acre of its 36-acre Island Quarter site in Nottingham, a city with a large student population desperately in need of housing. Based on market rents the scheme could generate a rent roll of £5.7m and be worth £90m at current PBSA yields when it completes in September 2023. Construction costs of £54m will be debt funded.

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