Liverpool

Complete turnaround of a significantly under performing asset. Asset management increased triple net income by over £200k and asset management improved capital value by more than £1.5m in under 3 years.

Background

In January 2017 JMC were approached by an existing client to assist a family member who owned a parade of shops in Norris Green, Liverpool. The property had been owned by the family for more than 40 years and had once boasted a Tesco as well as one of Liverpool’s largest and most well-known indoor markets for over 30 years. When the indoor market vacated in 2015, footfall declined and by the time we were instructed in March 2017, Poundstretcher had served notice to vacate, the pub was in administration and not paying any rent, and the indoor market was still vacant. There were a further 2 vacant units along the parade and tenants were in arrears, threatening to leave. The Service Charge was running at over £100,000 and included a night time security guard, and with the property more than 50% vacant this was eating into the net income for the client.

At the time we feared the worse. The triple net position was leaving the owners with next to no income. The bank was threatening to call in their loan and appoint receivers and to make matters worse, Aldi had just developed the site behind including new retail units similar to the subject parade. We nonetheless got to work to actively asset manage the site. We worked in conjunction with lettings agents, LSH and local firm SK Real Estate, to secure new lettings. We worked with the landlord and tenants to manage expectations in terms of rental levels, cleared all arrears and ensured that the tenants remained. We also looked at ways to actively reduce the Service Charge.

Outcomes

• Unit 1 – Re-let within 18 months to a local soft play and cafe operator
• Unit 2 – Let to an indoor inflatable business for £50,000 in Sept 2019
• Unit 3a – Dilapidations claim settled with Poundstretcher, property re-let in April 2019 to a local food retailer
• Unit 4 – New pub operator found at higher rent than previous operator
• Unit 5 – Re-let within 6 months of instruction, to a National Charity

• The service charge has been more than halved from over £100,000 p.a. to approx £50,000 by removing overnight security and installing CCTV & access control to the site. New lighting has also been installed
• Rent has more than doubled from £130,000 to £285,000
• All other tenants have remained despite initial indications they were going to leave
• Value in 2017 was in the region of £1.5 million and the investment would now sell for a sum in excess of £3 million

ClientLipville Investments Year2017LocationNorris Green, LiverpoolServicesManage, Lease