Capital & Regional report a robust beginning to the year
Capital & Regional, the UK focused REIT with a portfolio of dominant in-town community shopping centres, has announced its half year results to 30 June 2019.
Highlights for the company included:
- 44 new lettings and renewals in the period at a combined average premium of 31.2 per cent to previous passing rent and a 6.9 per cent premium to ERV
- Contracted rent robust at £61.1m down 1.9 per cent (June 2018: £62.3m) with new letting activity partially offsetting impact of CVAs and administrations
- Net Rental Income (NRI) down £0.8 million or 3.1 per cent to £25.2 million (June 2018: £26.0m) due to CVAs and retailer restructurings, which impacted by approximately £1.1m
- Footfall significantly outperformed the national index with its three London centres increasing by 0.6 per cent. There were 37.2m visits across the wider portfolio, reflecting a decline of 1.8 per cent, substantially ahead of the national index, which was down by 3.6 per cent.
Lawrence Hutchings, chief executive, said: “The business has again produced a robust set of operational results in what remains a challenging period for UK retail. We remain confident that with our Community Centre strategy, focussed on providing non-discretionary and needs based products and services, we are well placed to continue this trend and to evolve with the ongoing structural changes in the retail sector, as evidenced by our high occupancy, resilient income metrics and strong leasing performance.
“We have been making solid progress to strengthen the balance sheet and provide additional liquidity given the fall in valuations, due primarily to the impact of CVAs and retailer administrations and market yield shift, which has increased net LTV to 52 per cent. In August we conditionally exchanged on the sale of non-core land at Wood Green which is due to realise £5m. We have also reached an advanced stage in the identification of a preferred development partner to fully fund and build out the c.450 apartment scheme at Walthamstow that was consented in the second half of 2018. This creates the potential to realise, subject to planning, a capital receipt of approximately £20 million during 2020 and has provided further confidence and read through to the residential opportunity at Ilford which we believe could be in excess of the 200 apartment scheme currently consented. Furthermore, we have agreed terms on a 12 month amendment to our Luton facility which provides greater headroom. This follows the previous amendments to our Hemel Hempstead and Group Revolving Credit Facilities earlier in the year to support ongoing capex projects.
“The Board has also announced today that it is in discussions with Growthpoint Properties Limited (“Growthpoint”), the largest real estate investment trust primary listed on the Johannesburg Stock Exchange, about Growthpoint acquiring a majority stake in the Company through a combination of a partial offer in cash for Capital & Regional shares and an injection of capital to support the Company’s strategy through a subscription for new Capital & Regional shares. As a consequence of this, the Board has decided to defer a decision on the level of the interim dividend until such process has concluded.”