LONDON (Alliance News) - Capital & Regional PLC on Wednesday said its operational performance has been strong in the first half of 2016 with a "significant" volume of new lettings, and said the continuing momentum in letting activity since the result of the UK's vote to leave the European Union has been "encouraging".
The shopping-centre investor said its contracted rent rose 9.5% at the period-end on June 30 to GBP63.6 million, up from GBP58.1 million at December 31, which it said was primarily thanks to its purchase of The Marlowes shopping centre in Hemel Hempstead in January. Like-for-like contracted rent grew by 3.2% when compared with a year earlier, and by 1.2% from December 31, Capital & Regional said.
Capital & Regional noted that it has seen a "high level of leasing activity" in the first half of 2016, with 27 new lettings and 11 lease renewals, totalling GBP3.0 million, and said this positive leasing momentum has continued after the UK referendum across its whole portfolio. Since June 24, 12 new leases or renewals have been agreed or have progressed to being in solicitors' hands, the company said.
Footfall has been robust within the company, and has followed an improving trend in the period, outperforming the national benchmark by 1.4%, Capital & Regional said.
However, as a result of the increase in stamp duty, introduced on April 1, Capital & Regional said its net asset value at June 30 has fallen to GBP495.7 million from the GBP503.2 million recorded on December 30.
"Our operational performance has been strong in the first half of the year with a significant volume of new lettings highlighting the demand for good quality space at affordable rents in town centre locations. Although occupier markets may be sensitive to any changes in consumer spending which might arise against an uncertain backdrop, our footfall has remained resilient and the continuing momentum in letting activity since the result of the referendum is encouraging," said Chief Executive Hugh Scott-Barrett.
"As we move into the second half of the year, we are intensifying our focus on the recycling of capital, through which we believe we can crystallise attractive returns and take advantage of any increase in accretive investment opportunities," Scott-Barrett added.
Shares in Capital & Regional were up 4.4% at 53.25 pence on Wednesday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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Capital & Regional (CAL)