25th Aug 2006 16:15
FOR IMMEDIATE RELEASE25 August 2006LAP ACQUIRES CENTRAL LONDON PORTFOLIO FOR APPROXIMATELY ‚£50.3 MILLIONLondon & Associated Properties PLC ("LAP"), the specialist retail propertyinvestor, today announces that it has conditionally agreed to acquire theentire issued share capital of APL Ocean Limited ("APL Ocean") and its directlyand indirectly wholly owned subsidiary undertakings including AtlanticProperties Limited for an initial consideration of approximately ‚£50.3 million(the "Acquisition"), subject to a net asset adjustment post completion of theAcquisition (capped at ‚£10 million).APL Ocean comprises a number of private companies each directly or indirectlywholly owned by APL Ocean which owns a portfolio of property assets located incentral London made up of a mixture of retail, market trading, office, andresidential properties. The portfolio of properties generates rental incomethrough a variety of leases and licenses. The estimated net annual incomeaccording to the property valuation report prepared by King Sturge LLP is ‚£2,981,965.The Acquisition will be funded by an extension of ‚£50,000,000 to LAP's existingcredit facilities with The Royal Bank of Scotland plc and by utilising LAP'sexisting cash resources.In view of its size, the Acquisition is conditional, amongst other things, onthe approval of Shareholders. This approval will be sought at the ExtraordinaryGeneral Meeting ("EGM") to be held at Carlton House, 22A St James's Square,London SW1Y 4JH at 10 a.m. on 13 September 2006. A circular outlining theresolutions to be taken at the EGM and outlining further details of theAcquisition has today been posted to shareholders. The circular is alsoavailable at the document viewing facility of the UKLA at the UKLA DocumentViewing Facility, Financial Services Authority, 25 The North Colonnade, CanaryWharf, London E14 5HS.Background to and reasons for the AcquisitionOver the past two years, the Board has actively sought to acquire shoppingcentre assets to add to its existing portfolio. The Board has considered anumber of potential property investment opportunities, and in some cases theCompany has entered into early stage negotiations, but as a result of both thecommercial terms available and the Company's robust investment criteria, nosignificant acquisitions have been made since 2003. The Company regularlyupdates Shareholders in relation to its investment criteria in its annual andinterim accounts.The Board has identified the opportunity to acquire the APL Ocean propertyinvestment portfolio and therefore made the decision to widen the scope of itsinvestment criteria, whilst remaining focused on retail properties where theBoard believes LAP can enhance shareholder value through its active propertymanagement approach.The acquisition of APL Ocean provides the opportunity to acquire a portfolio ofcentral London properties that comprise a mixture of retail, market trading,office, and residential properties.The Directors' believe that those areas of London in which the APL Oceanproperty investment portfolio is located are likely to enable LAP to attractsignificant interest from retailers, occupiers and investors. The Directorsbelieve that the size and location of APL Ocean's property assets make it botha rare opportunity and a significant acquisition for the Company.In the Directors' opinion, the properties comprised in the Atlantic Groupportfolio, which are approximately 90 per cent. retail by rental income,present an opportunity to use the Company's existing property managementexpertise to improve revenues from the portfolio from their current level inthe short to medium term. The Directors intend to maximise the value of theportfolio by refurbishing and upgrading certain properties. The Directors havehad preliminary discussions with professional advisers in this respect.In the Directors' opinion, the properties are in sought after London locations,and in certain cases there is potential to improve their configuration and addsignificant lettable space. The Directors believe that this could addsignificant value to the properties and thereby increase LAP's net assets andearnings over the medium term. The acquisition of APL Ocean will increase therental income derived by LAP.Information on APL OceanAPL Ocean comprises a group of companies that owns in aggregate nine separateproperties, all of which are in central London. It is privately owned and sinceincorporation has been family-controlled and managed. The properties have beenacquired by the Vendors and their family over many years. A summary of theportfolio of properties the subject of the Acquisition is set out below:Chenil House, 181/183 Kings Road, London SW3:A substantial freehold in Chelsea. The ground floor and part of the first floorare let to Daisy and Tom, the childrenswear retailer. There are four floors ofoffices above. The total rent is approximately ‚£620,000 per annum.Antiquarius, 131/141 Kings Road, London SW3:An extensive long leasehold building approximately 100 metres east of ChenilHouse arranged as an antiques centre with 110 stall holders plus 5self-contained shops fronting the Kings Road. The first floor contains officesand a 119 square metre vacant residential unit. Gross rental income isapproximately ‚£1,110,000 per annum and there is a ground rent payable of ‚£53,000 per annum to the Cadogan Estate as freeholder.Rogers Antiques Galleries, 65 Portobello Road and 76 Kensington Park Road,London W11:A large freehold antiques centre in the Portobello Road. The upper floors areresidential and have been sold off on long leases. Total income isapproximately ‚£190,000 per annum.54 Chepstow Villas, London W11:A large freehold house in Notting Hill. The basement has been incorporated intoRogers Antiques Galleries. The house is currently let on an assured shortholdtenancy at ‚£117,000 per annum.414/416 & 426/430 Coldharbour Lane, Market Row, Coldharbour Lane, BrixtonVillage, Coldharbour Lane, 17/23 Electric Lane all in Brixton, London SW9:Two adjacent established freehold markets in the centre of Brixton. Market Rowhas 40 self contained units and is fully let. Brixton Village has 113 units andbacks on to Atlantic Road. Both markets are principally single storey, althoughBrixton Village has six residential units at the Coldharbour Lane end. Inaddition, a small area (approximately 20 square metres) of Brixton Village isheld on a long lease from Railtrack at ‚£1,500 per annum. There are also 4separate shops included on Coldharbour Lane and the adjacent Electric Lane. Thetotal rental income is approximately ‚£1,100,000 per annum.The Mall, Camden Passage, 359 Upper Street, London N1:A Grade II listed freehold building in the centre of Islington. There are 35stallholders at ground floor. The first floor comprises a restaurant and vacantoffices. The total rental income is approximately ‚£290,000 per annum.Gateway Arcade & Phelps Cottage, 355-357 Upper Street, Islington, London N1:A newly-constructed freehold A2 (office) building that has been let in itsentirety to Foxtons Estate Agents at ‚£230,000 per annum and a grade II listedfreehold vacant house in need of refurbishment.The value of the gross assets of the Atlantic Group as at 30 November 2005 was‚£60,338,000. The Atlantic Group's profit before taxation for the year ended 31March 2005 was ‚£2,778,000.John Heller, LAP's Chief Executive, said: "This acquisition represents anexcellent opportunity to own a substantial retail portfolio in establishedcentral London locations. We believe that London will continue to benefit fromits emergence as Europe's premier financial centre, and that these propertieswill benefit from the growth that will follow. These buildings are principallyfreehold, large scale and single storey. We have identified clear opportunitiesto extend and reconfigure some of them, while at the same time, we believe wecan grow the rental income from day one. I look forward to updatingshareholders as our plans progress". Ends. Enquiries:London & Associated Properties PLC John Heller, Chief Executive Tel: 020 7415 5000 Robert Corry, Finance Director Panmure Gordon & Co: Tel: 0207 459 3600 Andrew Godber Andrew Potts Baron Phillips Associates Tel: 020 7920 3161 Baron Phillips .ENDLONDON AND ASSOCIATED PROPERTIES PLCRelated Shares:
London & Associated Properties