Balfour Beatty Share Price Jumps on Contract Win

on Jul 22, 2013
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iNVEZZ.com Monday, July 22nd: Shares in Balfour Beatty (LON:BBY) have risen more than 1.5 percent today after the U.K.’s largest construction group announced in a statement that it had won an £80-million contract to build student accommodation in London.

The contract award will see Balfour building a 19-storey student residence on Westminster Bridge Road near the River Thames in the centre of the UK capital. The development is being contracted by specialist student accommodation provider Urbanest and will deliver 1,092 student bedrooms. The project will also include a new sixth-form college, a health suite with a swimming pool and affordable office space.

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According to Balfour’s statement, main construction on the site is due to begin this summer. The student housing project is set to employ as many as 500 people, with completion in time for the start of the 2015 academic year.
The Westminster project follows Balfour Beatty’s successful collaboration with Urbanest on four previous student accommodation developments in London totalling around £100 million at 100 East Road, Hoxton, The Minories in the City of London, the T6 development at Kings Cross and Camley Street in NW1.

**UK Student Housing Market – “Key Growth Area” for Balfour**
Market participants view the student housing market in the UK as currently a resilient and stable investment, given the underlying supply-demand dynamics of. (Student Rents Rise As Demand Grows). According to a new analysis from international real estate advisor Savills, growth is expected to continue despite recent pressures on student demand due to increased tuition fees and threats to international student numbers through tougher visa controls.

Following weaker student rents during the 2012/2013 academic year, Savills forecasts total returns of 9.3 percent for the 2013/2014 year with static blended net initial yields at 6.3 percent and rental growth of three percent due to improving demand and restricted supply coming through.
Balfour’s Beatty’s Chief Executive Officer Andrew McNaughton echoed analysts’ estimates and remarked in a statement today that “the dynamic student accommodation market is a key growth area for Balfour Beatty around the world.”

!m[Britain’s Largest Construction Group to Build £80m Student Residence in Westminster](/uploads/story/4196/thumbs/pic1_inline.JPG)
**Work Starts on £121m Greenwich Peninsula Development**
In a separate development, a ground-breaking ceremony was held on Friday to mark Balfour Beatty’s start of construction on a hotel and residential project on London’s Greenwich Peninsula. The £121-million development will also include The Peninsula Tower, a 23-storey building offering 100 serviced apartments. With innovative building techniques used, construction of the mixed-used development is expected to be completed in two years, Balfour has noted.
**The Balfour Beatty share price in London was 1.42 percent up at 235.28p as of 10:46 BST today. Earlier during the session, the stock, which has lost more than 14 percent of its value in the year to date, reached a daily high of 235.7p.**

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