21 September 2015

LXB reshapes Greenwich assets

Longstanding client LXB Retail Properties Plc (LXB) has announced news of various transactions relating to its real estate interests in the Royal Borough of Greenwich. Since its IPO in 2009, LXB has made a number of investments in existing retail assets and development sites in the Greenwich area as part of a major retail redevelopment scheme.

As part of the pre-let arrangements entered into with J Sainsbury Plc in 2011 relating to the development of a new superstore at LXB's Charlton Riverside Place scheme, LXB agreed to buy Sainsbury's existing store at Greenwich Peninsula for £16m plus costs when the new premises were open for trading and the old store had been stripped out.

Subsequently in 2013, LXB entered into conditional contracts to sell the former Sainsbury’s and the adjoining former Comet store to IKEA, subject to satisfaction of a number of conditions including IKEA obtaining planning permission for a new 350,000 sq ft store and further strategic site acquisitions by LXB. All conditions have now been satisfied and a two-stage completion took place across a seven-day period in September 2015. 

With the Greenwich Peninsula currently undergoing significant regeneration to create an attractive and vibrant new mixed use urban quarter, LXB has also just acquired a 982 year leasehold interest from Royal London Asset Management in relation to a site adjacent to the proposed new IKEA for a purchase price of £38 million. The site is currently occupied by a 93,500 sq ft B&Q store, with 9 years unexpired on the occupational lease. The investment was part funded by a £23 million loan facility from Royal Bank of Scotland plc ("RBS").

Commenting on the conclusion of these contracts Tim Walton, CEO of LXB Adviser LLP, said:

I am delighted that the Group is able to announce these transactions. IKEA’s decision to come to the Greenwich Peninsula and the anticipated impact on customer footfall is very good news for other retail investments in the area, including Brocklebank Retail Park. IKEA has invested £40m just to acquire the site and we believe that it will be rapidly developing its new store. The B&Q directly alongside the new IKEA occupies a truly prime location in South East London and offers potential for significant capital growth in the medium term, as well as an attractive yield in the intervening period. These transactions deliver exceptional value for investors.”

Senior Partner, Smita Edwards, and Commercial Real Estate partner, Eugene McMahon, led the team advising LXB in relation to the various transactions, assisted by Ben Brayford and Hannah Rickard. Head of Property Finance, Victoria Edwards, advised on the loan facility provided by RBS, assisted by Rowena Marshall.

 

 

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