Since late 2009, we have invested considerable time and effort in establishing our two Brixton markets as cutting edge retail and leisure locations. Initially we worked with a specialist marketing company to offer pop-up shops to entice new retailers into a location that had suffered over the years from high vacancies and low investment. The vast majority of these early retailers converted into full leases at market rents at the end of their trial periods. Once we had established a critical mass of new exciting retailers, word of mouth and positive press articles created suffi cient interest to ensure that these markets are now fully let for the first time in approximately 20 years.
While this project has been a success throughout 2010, we do not feel LAP has the resources to develop the Brixton Markets further. Consequently, since the year end we have agreed terms to let the two markets to In Shops Ltd, a subsidiary of Groupe Geraud, Europe’s largest private market operator. The leases are at a base rent of £817,500 per annum with a profit share on the net rent above that amount. This increases to a 50:50 profit share on any net rent above £1,017,500. There will be a saving of direct staff costs and other central overheads and therefore we expect this deal to be cash neutral at the outset.
We are confi dent that In Shops shares our belief that Brixton will become one of the most successful market areas in London. In Shops has the resources, energy and experience to enable this to take place, and we expect to benefit from its success through the profit share in the medium term.
