(Alliance News) - Capital & Regional PLC on Thursday reported a narrowed loss for the first half of 2021, in spite of a fall in net asset value and revenue, due to the pandemic and also a drop in the value of its property portfolio.
In addition, the UK-focused real estate investment trust announced the signing of an exclusivity agreement with Hong Kong-listed real estate developer Far East Consortium International Ltd.
Under the deal, both companies will work over the next 18 months to identify and start the development of residential opportunities across Capital & Regional's shopping centre portfolio.
The deal will also assess where community retail and services can be added to Far East's existing portfolio and pipeline, as well as find new projects where the full potential of the partnership can be brought forward.
"Both FEC's and our own management team recognise the importance of sustainable mixed-use urban environments that enhance the sense of place and serve their local communities. The combination of our existing skills and resources will help to unlock further opportunities to create these across, and potentially beyond, our existing estate," said Chief Executive Officer Lawrence Hutchings.
For the six months ended June 30, Capital & Regional posted a pretax loss of GBP37.9 million, narrowed from GBP115.5 million the same period a year before, mainly driven by a smaller loss on the revaluation of investment properties to GBP42.4 million from GBP115.7 million.
However, revenue declined 6.6% year-on-year to GBP34.1 million from GBP36.5 million, due to lower rental income. As at June 30, Capital & Regional's net asset value halved to 113 pence per share from 229p, as the trust's portfolio valuation fell 8.4% to GBP482.7 million from GBP527.0 million.
In line with the year before, Capital & Regional has declared no dividend for the period.
"The momentum we are seeing across our business since the lifting of the third national lockdown in April has been very encouraging and led to the positive operational performance we are able to report today, reinforcing our belief in our community centres strategy and the quality of our real estate and platform," Hutchings said.
"Accepting the further fall in valuations during the period, current market dynamics in the sector as well as the wider economy provide cause for optimism that the investment market may be starting to stabilise. This, allied with the relative outperformance of our investment assets and the improving operational performance, provide the necessary base for making longer term strategic decisions and determining the best approach for addressing debt levels," he added.
Shares in Capital & Regional were down 1.5% at 65.61 pence on Thursday in London, while its Johannesburg shares remained untraded at ZAR13.00.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Capital & Regional (CAL)