TIDMCAL
RNS Number : 9157K
Capital & Regional plc
13 July 2017
13 July 2017
Capital & Regional plc
("Capital & Regional" or the "Company" or "Group")
Trading Update
Capital & Regional plc, the UK focused retail property REIT,
specialising in dominant community centres, today announces a
trading update for the first half of 2017, prior to its half year
results announcement which will follow on 10 August 2017.
Operating highlights(1)
Continued growth in rental income with further capex driven
gains expected in H2
-- Like-for-like(2) Passing Rent was GBP53.9 million at 30 June
2017, up GBP0.9 million or 1.7% from 31 December 2016. GBP1.1
million of additional annual rent is due to come on stream in the
next month, when new major units for Lidl and The Gym in
Walthamstow as well as the Travelodge at Wood Green are handed
over, providing further evidence of the growth in income driven by
our accretive capex programme and specialist asset management
platform.
-- Total Passing Rent at 30 June 2017 was GBP59.9 million
benefitting also from the acquisition of The Exchange Centre,
Ilford that completed in March 2017.
Strong occupier demand driving rents, occupancy and supporting
visitor numbers
-- Occupancy remained high at 95.5% at 30 June 2017, marginally ahead of December 2016 (95.4%).
-- Strong occupier demand for our town centre locations, with
high footfall and affordable rents, led to 22 new lettings and 12
lease renewals in the first half of the year totalling GBP2.0
million in contracted income, at a combined premium to ERV(3) of
8.4%, equating to an uplift on the previous passing rent(3) of
21%.
-- Notable lettings in the period include Lidl and Smiggle in
Walthamstow; Superdrug in Maidstone; Five Guys in Wood Green; and
Scotts, Kiko and KFC in Luton. The former BHS stores in Blackburn
and Redditch were handed over to Wilko and The Range respectively
and, as noted, our construction programmes to create space for
Lidl, The Gym and Travelodge at Walthamstow and Wood Green are
approaching completion.
-- There were 35.4 million shopper visits to our centres in the
first half of the year representing a modest 0.9% fall on a
like-for-like(4) basis, outperforming the national index which was
-2.7%. Our C&R Trade Index showed retailers' sales up 0.3% for
our schemes for the six months, with the month of June up 1.7%.
-- Car park usage has been stable and car park income at GBP4.7
million is up 11% on a like-for-like(2) basis. We have continued to
expand the Collect Plus service with over 20,000 parcels handled in
the period, an increase of 34% year on year.
Continued progress with major portfolio asset management
strategies
-- In Walthamstow, we achieved a key milestone, in submitting
the planning application for our combined proposals to deliver a
90,000 sq ft retail and leisure extension and 470 residential
units. A positive decision is anticipated later this year.
-- In Hemel Hempstead, we have commenced the first stage of our
repositioning strategy, with a positive public consultation on our
proposals to create a town centre leisure hub anchored by a cinema,
for which heads of terms have been agreed with a leading operator.
Launch of a formal planning application will follow shortly.
Property valuations
Robust valuations reflecting the defensive characteristics of
our portfolio
-- The valuation of the wholly-owned portfolio at 30 June 2017
was GBP879.8 million, reflecting a net initial yield of 5.97%. This
is in line with the 30 December 2016 valuation of GBP794.1 million
after allowing for capital expenditure in the period of GBP7.7
million and the GBP78.0 million acquisition of The Exchange Centre,
Ilford in March 2017, excluding acquisition costs of c GBP1.0
million.
Lawrence Hutchings, Chief Executive, commented:
"Whilst only my fifth week in the business I take much
encouragement from the clear evidence that this update provides of
the quality of our portfolio, with its London and South-East bias,
and consisting of assets which primarily cater for the
non-discretionary and value-orientated needs of our shoppers.
Furthermore, it demonstrates the improvements that our team of
experienced professionals is capable of delivering through our
focussed and active asset management programme. Our income has
remained robust with further asset management driven gains expected
to come on stream in the second half, despite the current uncertain
macro-economic backdrop and the continuing structural changes
taking place in retailing.
"We expect the pace of investment in our portfolio to increase
in the second half of the year as we progress the active
repositioning and improvements in customer proposition in our
centres, together with further significant milestones on major
transformational initiatives at Ilford, Hemel Hempstead and
Walthamstow. This will continue to fuel enhanced income growth
while further underpinning the strong footfall and convenience
credentials of our assets.
"The successful delivery of our GBP80 million accretive capital
expenditure programme, allied to an enhanced focus on improving the
efficiency of our operations, provides a strong platform for the
development and growth of the business in the coming years."
(1) Wholly-owned portfolio unless otherwise stated.
(2) Like for like excludes the impact of property acquisitions
or sales in the period. For the six months to 30 June 2017 the
wholly-owned figures on a like-for-like basis therefore exclude the
impact of the acquisition of The Exchange Centre, Ilford.
(3) For lettings and renewals (excluding development deals) with
a term of five years or longer and which did not include a turnover
element.
(4) Like for like excluding The Exchange Centre, Ilford and
entrances impacted by development work.
- ENDS -
For further information:
Capital & Regional plc 020 7932 8000
Lawrence Hutchings
Charles Staveley
FTI Consulting 020 3727 1000
Richard Sunderland
Claire Turvey
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. GBP1 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. It also has a 20% joint venture interest in the Kingfisher
Centre in Redditch. Capital & Regional manages these assets
through its in-house expert property and asset management
platform.
For further information see capreg.com.
Forward Looking Statements
This document contains certain statements that are neither
reported financial results nor other historical information. These
statements are forward-looking in nature and are subject to risks
and uncertainties. Actual future results may differ materially from
those expressed in or implied by these statements. Many of these
risks and uncertainties relate to factors that are beyond Capital
& Regional's ability to control or estimate precisely, such as
future market conditions, currency fluctuations, the behaviour of
other market participants, the actions of governmental regulators
and other risk factors such as the Group's ability to continue to
obtain financing to meet its liquidity needs, changes in the
political, social and regulatory framework in which the Group
operates or in economic or technological trends or conditions,
including inflation and consumer confidence, on a global, regional
or national basis. Readers are cautioned not to place undue
reliance on these forward-looking statements, which apply only as
of the date of this document. Capital & Regional does not
undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after
the date of this document. Information contained in this document
relating to the Group should not be relied upon as a guide to
future performance.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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