LXB Retail Properties Plc is a Jersey incorporated closed-ended real estate investment company, whose strategy is to invest in out-of-town and edge-of-town retail assets. The company has a strong and independent board of non-executive directors with significant relevant experience, chaired by Phil Wrigley.
The Company’s strategy is to capitalise on the structural change occurring in the out-of-town UK retail sector through focused acquisition of retail parks where there is scope, through development and asset management, to extract above average returns for Shareholders. The Group is an active investor and implements strategies to enhance the capital value of acquired assets.
LXB Retail Properties Plc was listed on AIM and CISX in October 2009.

http://www.lxbretailproperties.com/

INVESTMENT PORTFOLIO UPDATE

RNS


RNS Number : 4045W

LXB Retail Properties Plc

07 November 2014







For immediate release

7 November 2014










LXB RETAIL PROPERTIES PLC

(the "Company" or the "Group")



INVESTMENT PORTFOLIO 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, today provides an update on developments at four of its investments since the portfolio update on 25 September 2014. Good progress continues to be made across the whole portfolio; specific developments since the September announcement are outlined below.



Banbury Gateway



As anticipated in the September announcement, the sale of this investment property to The Crown Estate concluded in October 2014 when the Group received proceeds of £42.5m. Under the terms of the sale, The Crown Estate will fund the construction works and the Group will oversee the development and letting of the remaining space. McLaren Construction have been appointed under a fixed price Design and Build contract and construction works are underway with practical completion scheduled for early autumn 2015. It is expected that this major shopping destination, which will include many leading retailers including M&S, Next and Primark, will be open in time for Christmas 2015.



The Group owns another investment property adjacent to the proposed entrance to Banbury Gateway and has granted The Crown Estate an option to acquire which may be exercised at any time prior to 15 January 2015.



Biggleswade



Construction is continuing on programme and is now well advanced with practical completion of Phase 1 of this three phase project anticipated in March 2015. This involves constructing six units in the main retail park and the three unit terrace ('Plot S') which stands opposite the main retail park.



Full implementation of the Group's planning permission for over 364,000 sq ft of retail space (251,000 sq ft on the ground floor) requires vacant possession and the local authority made Compulsory Purchase Orders ('CPO') earlier in 2014 in case vacant possession could not be secured by agreement. There have been two developments since the September announcement: terms have been agreed to secure vacant possession of the Laura Ashley unit; and the period during which the Secretary of State's decision to uphold the CPOs could be challenged under Judicial Review provisions has expired with no such challenges emerging.



Stafford



Construction of the multi-storey car park and the enabling works for both the Kingsmead and Riverside investments are continuing on schedule. The Group has signed terms with RBS to provide £23.35m of development funding for the car park and Kingsmead and has entered into fixed price Design and Build contracts with Simons Group for the construction work.



The Group is also in advanced discussions to provide development finance for the Riverside investment and hopes to sign a bank facility and appoint formally a building contractor shortly.



The Group's planning application for a multiplex cinema on the Bridge Street part of the site adjacent to the multi-storey car park and restaurant terrace was approved in October 2014 subject to satisfaction of the usual conditions and the Group is in advanced discussions on Heads of Terms which it is hoped will lead to a pre-let to a national cinema operator.

Truro



The September announcement noted that the Group's application for a development on the western side of Truro, which includes a 78,000 sq ft ASDA foodstore and 435 houses, had been deferred to a Planning Committee scheduled for 26 September 2014, when it would be considered alongside two other foodstore applications. Disappointingly, the hearing was deferred again to allow a fourth foodstore application which came forward just before the scheduled meeting to be considered at the same time. As far as LXB is aware, the Group's application (which had been recommended for approval by planning officers) is the only one which is pre-let to a foodstore operator. The Group has lodged an appeal against the non-determination of its application.



Summary



The September announcement reported a high level of activity across the whole portfolio including a number of potential new pre-lettings. This still remains the case with a number of agreements for lease in solicitors' hands. The announcement also noted that the Group was discussing a number of approaches to acquire individual investments; several such matters are in solicitors' hands at the current time although it does not necessarily follow that agreed transactions will result. The Group remains mindful that, with the continuation vote due to take place in early 2015, shareholders need to have an up to date understanding of progress on the Group's activities and the resultant impact on capital returns; further announcements will be made if and when these various discussions result in exchanged contracts.

IC - the prospect of receiving a dividend equivalent to a 31% yield gets our vote.

ST of IC today - Needless to say I rate LXB’s shares a strong buy at 86p and have an initial target price of 99p, or 15 per cent above the current level. This could prove conservative if my estimate of net asset value uplift is on the money. Buy.

Might be worth a punt - need some more property exposure.