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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”)
TRADING UPDATE
Capital & Regional, the UK focused specialist property REIT, today announces a trading update for the first half of 2016,
prior to its half year results announcement which will follow on 18 August 2016.
Operating performance (wholly owned portfolio unless stated)
- Contracted rent was £63.6 million as at 30 June 2016, up 9.5% from £58.1 million as at 31 December 2015,
primarily due to the acquisition of The Marlowes, Hemel Hempstead.
- Like-for-like contracted rent increased by £1.8 million, or 3.2% from 30 June 2015 and £0.7 million or 1.2% from
31 December 2015(1).
- There has been a high level of leasing activity in the first half of 2016 with 27 new lettings and 11 lease renewals
totalling £3.0 million, at a combined 0.7% premium to ERV(2).
- Following the result of the UK Referendum on EU membership, positive leasing momentum has continued across
the whole portfolio with 12 new leases or renewals having been agreed or having progressed to being in solicitors’
hands since 24 June 2016.
- Terms have been agreed with new retail and leisure operators for two of the three BHS units in the wholly owned
portfolio contingent on the space being handed back by the administrator. Alternative offers are being assessed for
the third unit.
- Occupancy remained strong at 30 June 2016 with The Mall portfolio at 96.5% (96.4% at 30 June 2015). The
Marlowes Hemel Hempstead was 92.0% occupied at 30 June 2016.
- Footfall has been robust and has followed an improving trend in the period, outperforming the national benchmark
by 1.4%.
Property valuations
- The valuation of The Mall portfolio as at 30 June 2016 was £827.6 million at a net initial yield of 5.94%. This is an
increase of £4.9 million compared to the 31 December 2015 valuation of £822.7 million which represented a net
initial yield of 5.89%. Allowing for capital expenditure of £13.5 million the net revaluation deficit in the period was
£8.6 million, due primarily to the 1% increase in Stamp Duty Land Tax (SDLT) without which the net valuation
would have been broadly in line with December 2015.
- The Marlowes Centre, Hemel Hempstead valuation as at 30 June 2016 was £54.5 million, an increase of
£0.7 million from the acquisition price of £53.8 million and representing a net initial yield of 6.99%. Acquisition
costs were £2.9 million and capital expenditure of £0.1 million has been incurred since acquisition.
- The valuation of the Kingfisher Centre, Redditch as at 30 June 2016 was £163.5 million at a net initial yield of
6.24%. This represents a decrease of £0.9 million from 31 December 2015 due to the impact of the SDLT increase.
Capital expenditure on this asset in the period was £0.1 million.
- The valuation of the Buttermarket Centre, Ipswich increased by £16.3 million in the first half of the year to
£44.3 million as at 30 June 2016. Capital expenditure in the period was £9.1 million.
- Altogether the net movements in valuations and purchaser’s costs outlined above, including the 1% increase in
SDLT, would have the impact of decreasing the Group’s Basic NAV by £7.5 million or 1.1 pence per share from the
30 December 2015 NAV which was £503.2 million or 72 pence per share.
Hugh Scott-Barrett, Chief Executive, commented:
“Our operational performance has been strong in the first half of the year with a significant volume of new lettings
highlighting the demand for good quality space at affordable rents in town centre locations. Although occupier markets may
be sensitive to any changes in consumer spending which might arise against an uncertain backdrop, our footfall has remained
resilient and the continuing momentum in letting activity since the result of the Referendum is encouraging.
As we move into the second half of the year, we are intensifying our focus on the recycling of capital, through which we
believe we can crystallise attractive returns and take advantage of any increase in accretive investment opportunities.”
(1) The £0.7 million increase from 31 December 2015 was net of £0.3 million of rent reduction resulting from the BHS CVA process
(2) For lettings and renewals (excluding development deals) with a term of five years or longer and which did not include a turnover element
13 July 2016
JSE sponsor
Java Capital
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. GBP 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 seven shopping centres in Blackburn, Camberley, Hemel Hempstead, 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 950 retail units
and attract over 1.7 million shopping visits each week, through its in-house expert property and asset management platform.
For further information see www.capreg.com.
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