TIDMPNS
Panther Securities PLC
23 March 2017
23 March 2017
Panther Securities PLC
(the "Company")
Lease surrender, inequality of rateable value assessments and
Chairman's ramblings on housing
The Company is pleased to announce that it has received
GBP1,995,000 payment, conditional on vacant possession amongst
other things, to accept a surrender on 24 March 2017, four years
before the end of term, of the lease on our industrial unit at
Heybridge, Maldon, Essex. The rental forgone is GBP500,000 p.a.
This Maldon property contains approaching 200,000 sq ft of
mainly high bay brick built single storey warehouse and industrial
space on a freehold site of 9.5 acres in a sought after location
adjoining the Chelmer and Blackwater canal in the Heybridge Basin
area. The local Council have new proposals for this area, which
will probably be beneficial to us in the long term. We intend to
refurbish and restore the property where required and in due
course, offer out for letting at what we expect to be a higher rent
than previously received.
A contract for the sale of the upper part of 49-53 High Street,
Croydon has been entered into, with a sale price of GBP800,000 and
a 10% non-refundable deposit has now been received. Completion is
due on 31 May 2017. The upper part of 6,500 sq ft of offices had
permission for conversion to 6/8 flats and has been vacant for some
time. We retain the ground floor retail units, one let to
Sainsburys and with one under offer.
We have a number of other sites with residential planning
permission and also some on which permission is being sought. One
in Wickford, mentioned previously in reports to shareholders, is
being offered for sale and following a number of interested parties
making offers we are hopeful an acceptable offer will crystallise
shortly.
As the number of sites upon which we are seeking planning
permission could potentially produce a total approaching 800
residential units, I feel some ramblings reflecting the recent
White Paper on housing are appropriate and follow on at the end of
this statement.
I have written a number of times previously about the current
rating revaluation and this still requires further comment.
Rateable values are based on the rental value of the property
concerned. The rental value is correlated to the turnover and
profits that can be derived from the property. As a general rule if
a property's turnover goes down its rental value goes down.
Harrods and Selfridges are two of the finest Department Stores
in the United Kingdom, if not the world. Anyone who has the good
fortune and small fortune to be able to visit to buy from their
respective stores in Knightsbridge and Oxford Street, two of the
most prestigious and expensive retail positions in London, will be
delighted and impressed.
Their rateable value assessments between 2010 and the new 2017
assessment assessed as at 2015 have increased massively by 57% for
Harrods and 53% for Selfridges. Whilst sympathy is in order, one
must consider that in that period Harrods' turnover rose by 52% and
Selfridges' rose by 38% and presumably their profit rose
proportionally.
Because they are based in central London, I would bet a fiver to
a wine gum that their turnover since the Brexit vote will likely
have risen disproportionally higher still, due to the devaluation
of the pound in our British pocket, which made it cheaper for
tourists in their hoards to arrive and spend in the United Kingdom
and in particular Central London.
Of course, to suddenly spring a massive tax rise on these icons
and many others has to be handled carefully and thus, a phasing
arrangement to soften this increase was put in place. But, of
course, governments do not like losing income from soft targets
such as property users/owners, so to compensate for the loss of
instant increases the Government phased in the decreases due to
those whose rateable value has fallen and because they have no idea
about businesses, they phase in reductions on those with rateable
values over GBP100,000 from 4.1% to 5.9%, which I view as
derisory.
Even then, these parsimonious reductions are not as stated,
because those over GBP100,000 rateable value also have to pay a
levy possibly 1.5% towards assisting small businesses and all rates
payable are adjusted annually upwards for inflation probably about
3% next year i.e. 4.5% upwards against 4.1% downwards (so I believe
that as usual "government departments" are using statistics to fib
to the general public).
Most shareholders will know we are closely connected to the
Beales department store group, who have twenty trading stores, of
which the Group owns the freehold of eleven. None of the Beales
stores are located in Central London.
The turnover of the Beales stores over the 2010-2015 period has
probably fallen by at least 20-25% and thus, the total rateable
values have been reassessed to reflect this. A reduction of
GBP780,000 in the group's total rateable value , which in theory,
produces a reduction of GBP370,000 per annum in Beales' actual real
money cash payments to the Treasury. However, because of the daft
phasing arrangements, the reduction will only be GBP58,000 per
annum, which is about one eighth of the extra cost of the minimum
wage foisted upon them.
Thus, one could conclude that Beales, which is a well-loved
department store, in each of its locations but sadly loss making as
a group, is subsidising Harrods and Selfridges by GBP312,000 per
annum, whilst each of them are probably making massive profits. To
top it all, both Harrods and Selfridges are foreign owned so these
profits can go abroad.
I do not believe even Baldrick of Black Adder fame could devise
such a cunningly stupid plan. Unfortunately, we are not in his era,
when this crass stupidity would lead to heads rolling down the
scaffold.
RAMBLINGS ON A WHITE PAPER
If Mr Timpson finds time to read the latest White Paper on
Housing, I suspect he will be very jealous - why you may ask? Well,
it contains more cobblers than his 1000 shoe repair shops.
I have read it and although I feel it may have one or two useful
points contained in its 100 pages, I do not believe that these
points will translate into helpful government policy. If I had
prepared a report on the housing situation, I would have started as
follows:-
We have a housing crisis because our Governments over the last
15 years have encouraged 3,000,000 extra people to come and live on
our small island, when our Housebuilders could only cope with the
nation's existing population's growth.
The log jam in the supply of land (which is plentiful) is again
caused by three separate reasons.... ownership structure.....
planning requirements and the insatiable greed of Local
Authorities.
Shortly after the Second World War, compulsory acquisition of
land was implemented. During the last war (1939-45), central
government found it necessary to requisition properties for its
needs during this war. Having obtained a taste for the benefits of
acquisition by compulsion, numerous acts to consolidate compulsory
acquisition ability have been made since this time and thus, I
believe that the following happened.
Local Authorities compulsorily acquire land way beyond their
needs.
With other people's money.
From people who did not want to sell.
For social improvement works.
Which few people wanted.
At a cost that the people paying cannot afford.
Very many schemes did not proceed.
Even though authorised by bureaucrats.
Who had little idea of what was involved.
Who, soon after, retired on fat pensions.
And often moved to a high paying job.
In another bureaucratic government organisation.
Leaving it to new bureaucrats.
To deal with the land blockage they had created.
These newbies had no idea what the land was required for.
Who then dispose of sites in the most politically correct
way.
Thus not getting good value.
But only on very long leases.
That had very restrictive covenants.
To businesses that then had to pay enormous property taxes.
Irrelevant to profit generated from the particular property.
Who then either did well and wanted to move.
Or more likely needed to raise capital to pay off debts.
And then found that they needed a planning permission to get
best value for their site.
The Planning Officer then put many hurdles in the way.
Forcing owners to provide a huge amount of irrelevant but
expensive information.
Even though the Council already knew most of the
information.
"Then act, as slowly as possible, often taking over 2 years to
be ready to submit the application to the council for planning
permission".
And then:
Ask for a contract to be signed on short notice agreeing to a
huge payment that they have suddenly demanded to recommend for
planning permission, at the next Council meeting.
Or they will refuse to submit the application for permission or
change recommendation to refusal.
When the blackmail has been agreed and permission granted, a
separate department of the Council who request as the freehold land
owner, with a financial interest of negligible value, wish for
another huge chunk of money to revise those old lease clauses to
allow the permitted scheme to proceed.
They then take six months or more to explain their own detailed
requirements and even longer to provide a suggested legal
agreement.
By then, you are cowed into submission to agree to their
proposals.
And they will shortly require an extra payment called C.I.L.
(the "Completely Idiotic Levy" in my view), thus making all schemes
unviable.
And to top it all, the latest white papers suggest remedies that
will make matters worse.
I am not sure if I am living in George Orwell's "Brave New
World" or Lewis Carroll's "Alice in Wonderland".
The big surprise is that any houses get built at all.
Andrew Perloff
Chairman
For further information:
Panther Securities plc: Tel: 01707 667
300
Andrew Perloff/ Simon Peters
This information is provided by RNS
The company news service from the London Stock Exchange
END
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