The Local Shopping Reit Share Discussion Threads

[skyship] 29/1/2017 14:58

Strath - agreed - as per my post this morning - see 1886 above

[strathroyal] 29/1/2017 14:52

It's a regular comment from some on here that LSR must have sold their best properties and that they'll have great difficulty selling the rest. In reality the property is almost all secondary and tertiary quality and that applies to the shops that have been sold as well as those on the books.

[tiltonboy] 29/1/2017 11:58

This is what gives me a little comfort on the small stuff:

"Since implementing the above strategy, the Company has completed or exchanged for sale on a total of 22 properties for an aggregate sale price of GBP2.0 million representing a 1.75% premium to valuation before transaction costs. Furthermore, 25 assets have been scheduled for auctions in February, and agents have now been appointed on the majority of the planned private treaty sales."

They have already shifted some smaller stuff(at a small premium), but happy to admit that they may have been the more sellable properties.

It will certainly be interesting to watch/listen to the auction when they happen.

[spectoacc] 29/1/2017 11:52

Thanks both.

[skyship] 29/1/2017 11:27

sorry - posts crossed - thnx

[skyship] 29/1/2017 11:22

Tilts - on re-reading the new LSR strategy as you usefully re-post above, even though Alsopps is presumably listing Southern properties, there must still be a few lower value properties they could have included in their next sale.

[tiltonboy] 29/1/2017 11:21

It's already one of my questions.

[skyship] 29/1/2017 11:17

Specto - As I've stated before, the Project Minard sale split the portfolio in half; there was no cherry-picking for the first sale. The second listing - Project Renouvier - was an almost mirror image of the first successful sale.

LSR has a portfolio of highly marketable assets; but quite naturally has a load of small, less valuable, less marketable assets. They will however find a price from some local small investors, especially those eschewing the now less attractive BTL market.

Tilts - When you speak to LSR, could you also ask WHY they didn't list any properties in the Alsopp sale?!

[tiltonboy] 29/1/2017 11:05

Not certain why there is any confusion on strategy; this was only announced last month!



Road map for Property Disposals

As we have previously commented, our preferred approach was to dispose of the remainder of the portfolio, or the bulk of it, by way of a portfolio sale. Heads of terms were signed and significant work undertaken on three occasions with interested parties. However, for varying reasons none of these potential sales crystallised. Whilst that process was underway it significantly constrained our ability to dispose of individual assets.

Now that constraint has been removed, we have initiated the disposal strategy set out below. The pace of that programme is dictated by the number of properties we believe the market can absorb at sensible prices, but also the ability to process sales (particularly bearing in mind that a significant number of property sales will be subject to the statutory pre-emption procedures applying to residential leases).

Additionally, the road map below has been designed to maintain income whilst the smaller and less robust properties are sold.

1) October 2016 to December 2017:

a. Dispose of approximately 90 smaller or management intensive properties for an aggregate sale price of GBP10 million representing an average lot size of GBP110,000. These properties will be sold in regional and London auctions. There are auction cycles every two months, so we will aim to sell approximately 15 properties per auction cycle;

b. Market for private treaty sale approximately 25 properties with a combined value of GBP5 million, focussing on those that are geographically difficult to manage;

c. Sell 10 low-yielding properties for an estimated GBP5 million, by auction or private treaty.

The three categories above total GBP20 million in 125 lots. This equates to 25 property sales and GBP4 million in aggregate proceeds per quarter.

Since implementing the above strategy, the Company has completed or exchanged for sale on a total of 22 properties for an aggregate sale price of GBP2.0 million representing a 1.75% premium to valuation before transaction costs. Furthermore, 25 assets have been scheduled for auctions in February, and agents have now been appointed on the majority of the planned private treaty sales.

2) Early 2018:

The Company will be left with a 'core' portfolio of approximately GBP55 million (based on current valuations), comprising 200 of the larger and better-quality assets in a tighter geographic concentration. Furthermore, time away from the market will allow us to reposition the portfolio and undertake asset management initiatives at the individual property level in order to achieve maximum value.

In early 2018 the portfolio will be marketed as a whole for a limited period, as the Board believes that this will be the optimum disposal route (bearing in mind that the revised nature of the portfolio should make it easier for a purchaser to raise finance against it).

[redhill9] 29/1/2017 10:17

tiltonboy29 Jan '17 - 08:48 - 1881 of 1883 1 0
Specto,

They haven't sold the quality stuff. They are hoping to bundle that all together, following the sale of the smaller, and difficult bits. The process to sell the bottom end of the portfolio is forecast to take a year.

Thanks tiltonboy, I hadn't realised that. If selling the whole portfolio is one block isn't possible then that does seem a sound second approach. The alternative prospect of selling the good stuff first and being left with the dross was giving me concerns.

[tiltonboy] 29/1/2017 09:14

Not very hopeful for Leeds, but then again, what really matters is what it's in the books at.

[spectoacc] 29/1/2017 08:54

Ah OK - so junk out first. Will be very interested to see what the Pugh Leeds stuff goes for.

[tiltonboy] 29/1/2017 08:48

Specto,

They haven't sold the quality stuff. They are hoping to bundle that all together, following the sale of the smaller, and difficult bits. The process to sell the bottom end of the portfolio is forecast to take a year.

[spectoacc] 29/1/2017 08:44

Acuitus my favourite auction house - but they don't tend to take junk so LSR may struggle ;)

To be fair - LSR must have sold off the quality stuff already. But strewth - having once been a shareholder sucked in by the "buy units on 10-15% yields, bit of asset management, bit of gearing, pay out 9% divi pa", seeing what they're selling now makes me realise I'm the fool in "fool & their money..".

One of the Leeds lots flooded just over a year ago - wonder if that'll be mentioned in the legal pack..

[tiltonboy] 28/1/2017 20:50

Guessing didn't work in the Allsop auctions, as we didn't have any in there, so I wonder is there any point in doing the same for Acuitus. Probably wasted my time looking, but 18,31,38,44,46,47,and 52 would seem to fit the bill.

I will ask the company on Monday.

[hillofwad] 28/1/2017 17:33

Specto You are right I wouldnt give it to my dog for its dinner . The lease expires on the 2 units in March !!Its neither fish nor fowl? Sent into bat straightaway on completion with some Scunny tan freaks to try and negotaite terms for a new lease
How much ? We are holding over Boss-try getting us out! Fancy a wax?

[tiltonboy] 28/1/2017 17:29

I've had a good look at the individual properties, and there looks to be some decent stuff in the Manchester auction, but a lot less so at Leeds.

Quite a bit of property as part of the lots, which may make up for the lack of quality around.

[spectoacc] 28/1/2017 17:00

Must admit I look at things like this & think: "20% wouldn't be enough, let alone 10%".

[tiltonboy] 28/1/2017 16:33

Which properties do we have in the Acuitus auction?

[tiltonboy] 28/1/2017 16:30

The properties in Pugh Manchester have roughly £140k of contracted rent, and 92k in Leeds, so I would hope they can achieve £2m from those sales.

Will have a close look at the individual properties later.

[strathroyal] 28/1/2017 13:37

Skyship - I hope not! Aren't LSR supposed to be raising around £4M from each property cycle of c25 sales? Tilts has already reported that there aren't any properties in Allsop's next auction and I can only see 7 in the Acuitus one with reserves of £1.7M so they need to raise £2M+ from Pugh.

[skyship] 28/1/2017 12:37

£500k-£600k for the lot perhaps - all NW dross!

[hillofwad] 28/1/2017 10:28

You are asking someone who went to an Allsopps auction once bidding for a client and walked out not having realised I was the top bidder so probably not the best person to ask . I dont know !Give them a call

[strathroyal] 28/1/2017 10:12

Hillofwad - I understand from previous posts that you're in the trade so to speak so can you please explain to me re LSR's entries for the Pugh auctions, why all but one are priced 'Refer to Auctioneers Office' rather than stating a reserve price?

[tiltonboy] 18/1/2017 18:09

There's stuff in Acuitus and both Pugh auctions. Perhaps it's location based!

I will get the Lot numbers once the catalogues are out.