Presentation by Praxis Real Estate Management
The Committee received a presentation by Praxis Real Estate Management Ltd regarding an Asset and Property Management update report on Green Lanes Shopping Centre.
RESOLVED that at 10:05 am the meeting be adjourned to allow Praxis to seek legal advice on whether information they would be disclosing in their presentation was commercially sensitive.
The meeting resumed at 10:08 am and it was confirmed that there was no sensitive information involved in the presentation.
The Committee received the following highlights:
· The team of 6 introduced themselves. Green Lanes had a team of 40 working on all areas of the running of the asset.
· The Praxis team held a retail and regeneration portfolio of 11 commercial projects and 8 Council portfolios and they had never lost a mandate.
· The experience the Praxis team had for dealing in the regeneration of town centres.
· The site had been acquired for £8.2m in November 2021, the centre had some significant issues due to previous lack of investment and passive management.
· The rationale for acquiring the centre was based on this being a once in a lifetime opportunity, the investment into the centre would avoid the risk of further deterioration of the centre, address issues with the glass roof and water leaks, which the centre was known for, and the opportunities to improve the Joy Street and Boutport Street entrances.
· There were 9 vacant units and the service charge had spiralled when the Council acquired the Centre.
· Rent collection rate was at 63% prior to Praxis coming in.
· The shopping centre investment market had seen improved liquidity, with a jump in the number of deals fuelling a bounce in volumes that had continued into 2023.
· £156bn was transacted nationally last year, with the Quarter 4 of 2022 activity the third highest over the last 10 years.
· The start of 2023 had seen a strong investor appetite to shopping centre acquisitions albeit it was expected this would stabilise.
· Praxis had three steps to their approach of the centre:
Ø Step 1 short term – asset stabilisation; included rent collection increased to 97% and engagement with tenants
Ø Step 2 medium term – evolving the vision; sustainability strategy, list of capital projects, regenerate the former BHS and M&Co. units.
Ø Step 3 long term – delivery; continue to engage with tenants, deliver capital projects, atriums, floors and other centre enhancements.
· The removal of the glass pyramid atriums would alleviate the biggest problem of leaking water. To improve aesthetically the centre completion of the replacement of the floor tiles was recommended.
· In terms of sustainability, replacing all the halogen lightbulbs with LED would reduce energy consumption.
· Every year Green Lanes used around £140,000 of energy and emitted 80 tonnes of Carbon Dioxide emissions. Praxis were aiming to reduce emissions down ultimately to carbon net zero.
· Solar panels if installed on the car park roof would provide a pay back in 3-4 years.
· The long-term prospects of the centre would be determined by what the Council wanted to achieve with the centre.
The Committee noted the contents of the presentation.