Last checked at 12 Jan 2009 11:19
12 January 2009
CAPITAL & REGIONAL PLC:
POST-CLOSE STATEMENT
Capital & Regional plc, the co-investing property asset manager, today presents a brief corporate update together with the normal announcement of its fund valuations as at its 2008 year end.
In spite of significant falls in property valuations in the fourth quarter of 2008, the main financial covenants continue to be met as at the 2008 year end, being those for the core Group facility, the core facility for each of the X-Leisure and Junction funds, and for the Mall bonds.
Further steps are being taken to ensure that the funds remain in compliance with key financial ratios. Both The Junction and X-Leisure funds are progressing plans to finalise long-term structural solutions for their respective fund financing, details of which are expected to be published with the Group's full-year results in April at the latest. In order to create the necessary flexibility to implement these actions, The Junction's unit holders have already agreed to quarterly valuations whilst unit holders in X-Leisure are being asked to vote to provide similar flexibility. Assuming X-Leisure unit holders support the resolution, both The Junction and X-Leisure will be valued at 31 March 2009 valuations.
The operating environment in the UK remains challenging. We have seen good levels of rent collection for the quarter but there has been an increase in tenants going into administration, in particular, affecting the Mall portfolio. During Q4 a total of 13 retailers, occupying 39 units, went into administration in the Mall portfolio with a total rent exposure of £4.55 million (3% of passing rent). A majority of these tenants are currently still trading. The X-Leisure portfolio's defensive characteristics have been reflected in a more robust performance. Our teams are working hard to reduce the risk and impact of tenant failures and to exploit alternative asset management opportunities for any void units.
The German portfolio continues to demonstrate its defensive qualities with high occupancy and collection rates and negligible insolvencies.
A number of other actions can be announced at this time:-
Sale of Costco unit in Cardiff for £16.95 million completed on 30 December 2008.
Group debt (unaudited) has been reduced from £516 million as at 30 June 2008 to £113 million as at 30 December 2008, principally as a consequence of the Apollo transaction announced in August. It also reflects the agreement with the lenders on the remaining part of the German portfolio to allow joint control with Apollo and thereby remove the remaining German debt of £163 million from the Group balance sheet.
Measures have been taken which will reduce the Group's underlying cost base by at least £3 million per annum. This includes a number of redundancies.
The unit values of the Mall Limited Partnership, the Junction Limited Partnership and the X-Leisure Limited Partnership as at 31 December 2008 were as follows:
| Valuation of properties | Unit value at 31 December 2008 | Unit value at 30 November 2008 | Underlying valuation change in month (1) | Change in unit value (geared) in month (2) & (3) | Units owned by C&R | C&R percentage of fund | |
| Mall Fund | £1,692,093,196 | £0.5892 | £0.8062 | (10.8)% | (26.9)% | 157,742,057 | 16.7% |
| Junction Fund | £733,811,762 | £0.7750 | £0.9483 | (7.0)% | (18.3)% | 85,000,000 | 27.3% |
| X-Leisure Fund | £721,350,000 | £0.8303 | £0.9439 | (5.1)% | (12.0)% | 51,899,578 | 19.4% |
Notes:
(1) The underlying valuation change shows the increase/(decrease) in the value of the portfolio in the month as a percentage of the value of the portfolio at the beginning of the month.
(2) The change in unit value reflects the movement in the capital value (excluding the impact of debt mark to market adjustments) of the fund in the month. Investors separately benefit from quarterly distributions of net income and periodic capital distributions.
(3) The marked decline in the Mall was in large part due to alignment by the valuers with transactional evidence in the market.
(4) The unit values stated above do not include the value of the mark to market on the fund's interest rate swaps.
- ENDS -
Notes to editors:
About Capital & Regional plc
Capital & Regional is the co-investing asset manager which specialises in town centre shopping centres, out of town retail parks, and urban entertainment complexes.
Capital & Regional founded the Mall and Junction Funds in conjunction with Aviva Investors Global Services Ltd. It also founded the X-Leisure fund with Hermes Investment Management Limited, and has a number of other joint ventures and developments. Its shares are quoted on the London Stock Exchange.
For further information see www.capreg.com
For further information:
Capital & Regional
Hugh Scott-Barrett, Chief Executive Tel: 020 7932 8121
Charles Staveley, Group Finance Director Tel: 020 7932 8000
Maitland
Martin Leeburn / Emma Burdett Tel: 020 7379 5151