LXB Retail Properties has announced its annual results for the year ended 30 September 2015. During the period, the company’s EPRA NAV per share has reduced by 23.1% but this largely reflects the return of £82.6m of cash to shareholders in June. The company says that, taking into account the cash return, there has been an uplift in NAV of 10.4% during the year.
The company has been given consideration either to converting to a UK resident retail focused Real Estate Investment Trust or to an orderly wind up of the company and returning cash to shareholders. The board says that neither of these options is without difficulty but it is clear to them that the issues that need to be addressed with regard to a winding up look like they can be overcome. The board say that they believe that a winding up is likely to meet with the overwhelming support of Shareholders and that it is their intention to put forward a resolution at the AGM which will involve a proposal to realise the Group’s investments in an orderly fashion. They expect to put proposals to shareholders early in the new year and that, assuming these are approved, the substantial majority of Shareholder value will be returned by March 2017.
In terms of outlook and portfolio developments, the company say that the retail property market remains difficult especially in the food sector where it is well documented that retailers are looking to challenge contractual commitments wherever possible. Securing planning either in principle, or in looking to make changes of detail, remains an arduous process. However, the company says that it now has all of the planning changes it needs at Rushden Lakes to make a timely start on site next year. The company has secured three anchor retailers; Marks and Spencer, House of Fraser and Primark collectively represent 59% of the Phase 1 space.
The company has also achieved planning success at Higher Newham in Truro with Living Villages, whilst it has also completed and opened both Greenwich Meridian (Sainsbury’s/M&S scheme) and Banbury Gateway. They say that both schemes are 99% let and they have now received all material monies in respect of the respective sales.
Biggleswade Phase 1 achieved practical completion and has opened well with Phases 2 and 3 due to complete in spring 2016. In total, Biggleswade is now 92% let with only three units to go. The company has also realised value from the restructuring of its Greenwich Peninsula interests with the sale of the development site to IKEA who will shortly start on site to build their new 330,000 sq ft store. The company says that an acquisition adjacent to the proposed IKEA, which is let to B&Q, provide secure income and interesting short and medium term value creation opportunities.
In terms of sites with construction in progress, the company has operatrions at Stafford Riverside (practical completion date April 2016), Stafford Kingsmead (February 2016), Sutton (September 2016) and Biggleswade. The company expects to commence work on nthe following sites imminently Greenwich Brocklebank (practical completion date September 2016), Stafford leisure site (November 2016) and Rushden Lakes (Phase 1 October 2016). They say that activity levels across the portfolio remain very high!
LXB Retail Properties looking towards 2017 wind up: LXB