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Trading Update
CAPITAL & REGIONAL PLC
(Incorporated in the United Kingdom)
(UK company number 01399411)
LSE share code: CAL JSE share code: CRP
ISIN: GB0001741544
(“Capital & Regional” or “the Company” or “the Group”)
TRADING UPDATE AND ACQUISITION OF THE MARLOWES, HEMEL HEMPSTEAD
Capital & Regional plc, the UK focused specialist property REIT, today announces the acquisition of The
Marlowes Shopping Centre in Hemel Hempstead and a trading update for the second half of 2015, prior to its
year end results announcement on 4 March 2016.
Acquisition of The Marlowes Shopping Centre, Hemel Hempstead
- On 12 January 2016 the Group exchanged contracts with Standard Life Investments for the
acquisition of The Marlowes Shopping Centre, which is the main retail offer in Hemel Hempstead,
for £35.5 million reflecting an initial yield of 7.0%. The acquisition will be part funded by new debt
with the Royal Bank of Scotland of £17.8 million, secured on the asset, with the remainder being
financed through available Group cash resources. The acquisition is expected to complete in early
February 2016.
- Hemel Hempstead is a strong south east commuter town located just outside of the M25, which has
recently benefitted from significant investment from the local authority. The opportunity exists to
reposition this asset and potentially consolidate it with other retail properties adjoining the scheme, as
part of a regeneration of the wider town centre.
Operating performance
- Like-for-like contracted rent across the Shopping Centre portfolio at 31 December 2015 rose 2.8% to
£69.7 million compared to 31 December 2014. Across the portfolio there were 72 new lettings and
52 lease renewals totalling £7.9 million. Lettings and renewals were agreed at an average increase of
18.5% above ERV(1). The increase over ERV was primarily driven by new lettings resulting from the
conversion of less attractive or previously non-retail space into leisure.
- Leisure lettings in total account for £2.2 million of the £7.9 million and include the creation of a new
Travelodge at Wood Green, which will now be 78 rooms as opposed to the 35 previously reported,
and the creation or extension of gyms in Blackburn, Ipswich, Luton, Maidstone and Wood Green.
- Occupancy was very strong at 97.2% at 31 December 2015, an improvement of 1.1% compared to
96.1% at 31 December 2014.
- After a relatively slow start retail trading activity picked up in the second half of December with our
in-house ‘C&R Trade Index’ showing retailers’ like-for-like sales increasing by 1.6% compared to the
month of December 2014 and 1.7% across the whole year. Footfall was down a marginal 0.4% in
2015, but significantly outperformed the national benchmark which fell by 1.7%. Car park usage
across our portfolio was up 1% year-on-year.
- The importance of providing a multi-format retail offer was demonstrated by the continued expansion
of Click and Collect activity via our Collect + service which handled over 20,000 parcels during 2015
including 5,000 in December alone.
(1) For lettings and renewals with a term of five years or longer and which did not include a turnover element
Property valuations
- The valuation of the wholly owned portfolio at 31 December 2015 was £822.7 million at a net initial
yield of 5.9%, an increase of £31.7 million, or 4.0% on the valuation of £791.0 million at 30 June
2015. This has been driven primarily by an increase in valued income of £1.4 million (+2.8%)
alongside yield compression on specific assets, as a result of the execution of our asset management
plans. The capital expenditure spent on the wholly owned portfolio during the second half of the year
was £6.9 million.
- The valuation of the Kingfisher Centre, Redditch at 31 December 2015 was £164.4 million at a net
initial yield of 6.25%. This represents an increase of £7.9 million (+5.0%) from 30 June 2015. The
capital expenditure spent during the second half of the year was £2.3 million.
- The valuation of the Buttermarket Centre, Ipswich increased by £17.2 million (+160.7%) in the
second half of 2015 to £27.9 million at 31 December 2015. This reflects the rapid progress made in
repositioning the centre as a mixed retail and leisure scheme. The capital expenditure spent during
the second half of the year was £7.1 million.
Dividend
- In line with previous guidance, the Board anticipates paying a 2015 final dividend of at least 1.5p per
share which will result in a total dividend for the year of at least 3.0p per share. The final dividend,
and the proportion to be paid as a PID, is expected to be confirmed within the Group’s year end
results announcement.
Hugh Scott-Barrett, Chief Executive, commented:
“The accelerating momentum in terms of letting activity and capex spend seen in the second half of 2015
confirms that we are on track to deliver the attractive returns promised as part of Capital & Regional’s asset
management plans. The progress we are making in the transformation of Buttermarket Ipswich to a prime
leisure and retail asset also showcases the skills which we will bring to The Marlowes Shopping Centre, the
acquisition of which we have announced this morning.”
13 January 2016
For further information:
Capital & Regional: Tel: +44 (0)20 7932 8000
Hugh Scott-Barrett, Chief Executive
Charles Staveley, Group Finance Director
FTI Consulting: Tel: +44 (0)20 3727 1000
Richard Sunderland
Claire Turvey
capreg@fticonsulting.com
Java Capital Tel: +27 11 722 3050
JSE sponsor
Notes to editors:
About Capital & Regional plc
Capital & Regional is a UK focused specialist property REIT with a strong track record of delivering value
enhancing retail and leisure asset management opportunities across a c. £1 billion portfolio of in-town
dominant community shopping centres. Capital & Regional is listed on the main market of the London Stock
Exchange and has a secondary listing on the Johannesburg Stock Exchange.
Capital & Regional owns six Mall shopping centres in Blackburn, Camberley, Luton, Maidstone,
Walthamstow and Wood Green. It also has a 20% joint venture interest in the Kingfisher Centre in Redditch
and a 50% joint venture in the Buttermarket Centre, Ipswich. Capital & Regional manages these assets,
which comprise over 900 retail units and attract c. 1.7 million shopping visits each week, through its in-
house expert property and asset management platform.
For further information see www.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.
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