Last checked at 2 Aug 2019 07:00
2 August 2019
UK company number 01399411
LSE share code: CAL
ISIN: GB0001741544
LEI: 21380097W74N9OYF5Z25
CAPITAL & REGIONAL PLC ("Capital & Regional" or "the Company")
Trading Update
Capital & Regional, the UK convenience and community focused shopping centre REIT today announces a trading update for the first half of 2019 which has been characterised by continued evidence that our community strategy is working, strong leasing momentum with new lettings undertaken at a premium to previous rent and continued footfall outperformance. The trading update comes ahead of the publication of the Company's half year results announcement which will follow on 11 September 2019.
Community Centres Strategy delivering
Operational focus and investment in platform continue to deliver robust performance Affordable rents and service charges Progress on residential at WalthamstowSale of non-core land at Wood GreenFirst stores recommence trading at Walthamstow following fire last week.
Strong leasing momentum maintains high occupancy
44 new lettings and renewals in the period totalling £3.1 million in rental income at a combined average premium of 31.2%1 to previous passing rent and a 6.9%1 premium to ERV. Leasing activity consistent with Community Centre strategy focussing on needs based and non-discretionary retailers Contracted rent robust at £61.1 million down 1.9% (June 2018: £62.3 million) with new letting activity offsetting impact of CVA's and administrationsLike-for-like2 Net Rental Income down £0.8m or 3.1% to £25.2 million (June 2018: £26.0 million) including a c. £1.1 million, or 4.2%, impact from CVAs and retailer restructuringsOccupancy remained high at 96.8% (31 December 2018: 97.0%)Footfall significantly outperformed the national index with our three London centres increasing by 0.6%. There were 37.2 million visits across the wider portfolio, reflecting a decline of 1.8%, substantially ahead of the national index, which was down by 3.6%.
Valuations
Portfolio valuations fell by 6.8% in the period to £797.3 million (December 2018: £855.2 million) reflecting an 11% reduction in regional asset values and a 3% reduction in the three London assets Capital expenditure in the period was £5.9 million progressing our repositioning programme.
Non-core disposals
We have agreed the sale of non-core land at Wood Green for £5 million, in line with the book value. Proceeds are expected in Q4 2019.
Walthamstow residential partnering
There is strong interest from both Build to Rent and Develop to sell operators to establish a partnership to fully fund and develop out the c.450 apartment scheme that was consented in the second half of 2018. We anticipate announcing a partner later this year.
Walthamstow - first stores trade
Following the fire at our Walthamstow shopping centre on Monday 22 July 2019 we are pleased to advise the first stores have now reopened with further openings planned over the coming weeks for circa 75% of the stores. The remaining areas are expected to re-open progressively over the next six to nine months. The Group is fully insured for both reinstatement and loss of income.
1For lettings and renewals (excluding development deals and leases impacted by CVA's) with a term of five years or longer and which did not include a turnover element.
2Like-for-like excludes the impact of property purchases and sales on year to year comparatives.
Lawrence Hutchings, Chief Executive of Capital & Regional said:
"I am pleased that the drive and energy of our team has enabled us to present a robust set of operational results in what has been a challenging period for UK retail. Our belief that our focus on Community Centres, which provide non-discretionary and needs based products and services, are best placed to counter the effects of structural changes in the retail sector and slowing in consumer spending, is borne out by the Company's ongoing operational performance. Our London weighting together with affordable rents, averaging £15 psf, are a key advantage and this provides a base for us to remerchandise our centres assertively as the leasing performance indicates.
"The progress on Walthamstow both in terms of re-opening the centre and in selecting a residential partner, where we have seen strong interest and bidding, to deliver the consented residential scheme is testament to the quality of our assets and our approach to unlocking value. Likewise, the decision to unlock value by selling the residential site at Wood Green to an experienced developer is appropriate at this point."
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For further information:
Capital & Regional plc 020 7932 8000
Lawrence Hutchings
Stuart Wetherly
FTI Consulting 020 3727 1000
Richard Sunderland
Claire Turvey
Methuselah Tanyanyiwa
capreg@fticonsulting.com
About Capital & Regional plc
Capital & Regional is a UK focused specialist property REIT with a strong track record of delivering significant value enhancing retail and leisure asset management opportunities across its c. £0.8 billion portfolio of in-town, dominant community shopping centres.
Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. Capital & Regional manages these assets through its in-house expert property and asset management platform.
For further information see www.capreg.com.