Lxb Retail Properties Share Discussion Threads

[speedsgh] 04/5/2016 13:16

Sale of Rushden Lakes Completed & Lettings Update -

LXB Retail Properties Plc, the Jersey resident closed-ended real estate investment company focused on edge of town and out of town retail assets, is pleased to confirm the disposal of its Rushden Lakes investment to The Crown Estate ('TCE') completed on 4 May 2016, and to provide an update on recent lettings activity.

Rushden Lakes
The contract for the disposal of Rushden Lakes was exchanged just over 12 months ago in April 2015 but completion was conditional on satisfaction of a number of conditions, largely relating to planning, lettings and highways. The contract is a forward funding arrangement whereby TCE will fund the future development costs with LXB retaining responsibility for overseeing the development and lettings.

The contract reflected a number of assumptions regarding both costs and the terms of pre-lets and, as is normal with a conditional forward funding agreement, these assumptions have been revisited as part of the process of completing the disposal to reflect the latest information and assumptions on letting terms, additional costs and contingencies, and the phasing of cost items. In addition, a further £2m of costs, which the Group expected to incur prior to completion and recover as part of the initial completion proceeds, will now be funded directly by TCE.

Taken together, the combined effect of these revisions is to reduce the initial completion proceeds from £75m (anticipated in the Circular sent to shareholders in February 2016) to £65.2m; this amount has been received in cash.

Although the initial cash proceeds are lower than originally anticipated, the majority of the reduction relates to timing differences. However, £3m of the difference in proceeds adversely impacts the Board's view of Phase 1's ultimate contribution to Net Asset Value. To set this in context, the Board's current view on the ultimate Net Asset Value of the Group's portfolio is not materially different from its view at the time of the Annual General Meeting in February 2016, save for the impact on all investment property valuations as a result of the 1% increase in SDLT announced by the Government in March 2016...

...The Board has already agreed in principle that the bulk of the initial completion proceeds in respect of Rushden Lakes will be returned to shareholders using the capital return mechanism, which was approved at the recent Extraordinary General Meeting, and a committee of the Board is scheduled to meet later this week to consider final proposals. Shareholders will be updated as appropriate after that meeting.

[loobrush] 03/5/2016 13:37

Crumbs getting exciting here--- its up to 104p being paid.

What's caused this flurry probably investors now realising the value here and the cashback due of around 40p odd

Keep it up LXB.

[mad foetus] 03/5/2016 12:49

From last year's interims:

"Importantly, in early 2016 we also expect to have satisfied all the conditionality to allow the completion of the sale of the Rushden Lakes investment to The Crown Estate. That would have a major influence on NAV. We expect, conservatively, to receive cash of approximately GBP70m at completion at which point we would expect to recognise increased NAV of at least GBP19.5m compared with the 31 March 2015 balance sheet value. The Rushden Lakes announcement on 7 April 2015 referred to potential additional value from the second and third phases of Rushden Lakes. It is still too early to provide a meaningful view on the potential value of that, but we would expect to be able to offer much greater clarity by the time the sale to The Crown Estate completes. We believe there is potential for significant additional returns."

Since then, we've had news of extensive pre-lets, planning permission for the cinema, contracts passed on roads etc. I think the sale announcement is imminent - we were told on 5 Feb that it was expected to be within 3 months.

Time to find out what "significant additional returns" means.

[badtime] 03/5/2016 12:40

Nudging higher

[mad foetus] 29/4/2016 11:05

I'm being quoted 0.75 above the buy price for a £10k lot.

[badtime] 28/4/2016 20:50

Slowly but surely

[catsick] 27/4/2016 02:26

My guess is they are holding off giving too much clarity at the moment as they dont want to suddenly post 20p on the nav straight after re setting the carried interest payout, best drip out over the next 12 months, the payout for rushden we probably see a little of it

[stupidboypike] 26/4/2016 15:38

badtime, probably, especially if the discount to NAV widens after the return. Difficult to find good homes for cash at the moment in my opinion. BR SBP

[badtime] 26/4/2016 14:55

SBP..will you use the proceeds of any capital repayment to buy more?

[papy02] 26/4/2016 14:52

Amusingly, the case to invest (or stay invested) here, rests on believing the BoD of LXB is untrustworthy. I.e. that one or both of the following cannot be trusted:

1. The 101p NAV at Jan 1st is a true and fair valuation

2. The new performance incentive for the asset-manager, re-based on that 101p NAV, and which will likely kick in i.r.o. 109p cash/share returned (assuming current share-count for illustration), is "stretching".

I'm happy to stay invested here, at my maximum allocation, as I don't believe either of the above statements.

E.g. re Rushden:

- the Mar 31st 2015 Interims state, re Rushden "We expect, conservatively, to receive cash of approximately £70m at completion at which point we would expect to recognise increased NAV of at least £19.5m compared with the 31 March 2015 balance sheet value." (my bold)

- The recent AGM/EGM Circular states "We expect to complete the sale of Rushden Lakes to The Crown Estate in the next three months. This is likely to give rise to a realisation of cash in the order of £75 million".

- Since then we have recent positive news re cinema planning consent which may further enhance proceeds. (And also a statement that "the sale ... may complete in the near future").


The market seems reluctant to price the share at a premium to the last published NAV of 101p. Hopefully we will get an RNS re Rushden-completion soon that will fix that.

[stupidboypike] 26/4/2016 12:20

Yes, I couldn't understand the drop by more than the payout last time for exactly that reason. I'm happy to hold these, as you say all the way. Best regards SBP

[fizzypop] 26/4/2016 11:23

Penultimate sentence, I think, should read:
But to be honest, I think there will be very few shares capable of being bought at 50p. I'm fine with the maths and your final conclusion.

[mad foetus] 26/4/2016 10:44

The psychology after the payout is interesting.
To keep figures simple, say NAV is currently 125p, price is 100p and payout will be 50p: discount is 20% (I think that's the way the maths works).
After payout, share price will drop by 50p and it will go: NAV 75p, price 50p, discount of 33%.
But to be honest, I think there will be very few shares capable of being bought at 50p: I think most people who hold now are planning to hold all the way.

[fizzypop] 25/4/2016 15:38

As with the last capital payout on 28 May 2015 (ex-div date) it may pay to wait until after to pick up cheap shares as the market usually over reacts with PIs panicking on seeing a major drop in the share price Just a thought.

[888icb] 25/4/2016 10:31

Good to see move above £1

[mad foetus] 25/4/2016 09:17

I'm not sure whether the "significant boost" to LXB's plans to expand the Rushden offering resulting from planning consent last week will result in an uplift to the price we get from Crown Estates. I recall the interims last May talking about the chances of material uplift in the prices of some assets. LXB is proving a very good place to be in a difficult wider market.

[18bt] 25/4/2016 07:24

Useful update this morning.

[loobrush] 22/4/2016 20:05

Sorry it is £75 million divided by 168,350,000 =44.5p

[loobrush] 22/4/2016 20:01

So £75 million divided by 175 million shares in issue = appx 43p a share.

[mad foetus] 22/4/2016 15:27

From the Chairman's letter of 5 February:

Timing of cash returns
We expect to complete the sale of Rushden Lakes to The Crown Estate in the next three months. This is likely to give rise to a realisation
of cash in the order of £75 million and it is intended that this will be returned to Shareholders by means of the B share scheme as described
above assuming it is approved by Shareholders.
If Shareholders approve the proposals for cash realisation, the Investment Manager will be instructed to realise the value of our assets at
Greenwich and Sheppey and the Board would anticipate a further return of cash in the summer from the realisation of these assets. In addition,
the Investment Manager will be instructed to seek offers for our investments at Stafford and Sutton, although it is likely that any sales will be
conditional on practical completion and/or opening which will delay further returns of cash until nearer the calendar year end.

So, 3 months from 5 February means we should hear in the next couple of weeks: I wonder whether the planning consent Yamaha found may have been the last piece in the jigsaw: it can only be accretive.

[speedsgh] 22/4/2016 12:18

Yes, good spot yamaha. Further confirmation here...

12-screen cinema for Rushden given the go-ahead -

A spokesman for LXB Properties, owners of Rushden Lakes, said: “We are delighted that consent has been granted and would like to give our thanks to all of the residents and groups who have supported the project. Rushden Lakes will be a truly unique leisure, retail and tourism destination and one that will put the region on the map. We look forward to continuing to work with local groups and residents as we move forward with the scheme.”

Rushden Lakes | Cineworld 12 Screen Cinema and Restaurants Approved -

[celeritas] 22/4/2016 11:44

No, it was only Wednesday so good find. Approval is always good.

This was the last I'd heard about it.


Approved so great news as it adds value.

[yamaha865] 22/4/2016 11:41

Don't know if this was a formality but seems positive...

[speedsgh] 22/4/2016 10:31

Can't see anything new on IC website apart from its inclusion at #94 in part 1 of the AIM Top 100 article released today. Only 2 paragraphs with a HOLD recommendation so can't imagine that will have had any effect.