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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 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 £53.9 million at 30 June 2017, up £0.9 million or 1.7% from 31 December 2016.
£1.1 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 £59.9 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 £2.0 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-like4 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 £4.7 million is up 11% on a like-for-like2 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 £879.8 million, reflecting a net initial yield of 5.97%.
This is in line with the 30 December 2016 valuation of £794.1 million after allowing for capital expenditure in the period
of £7.7 million and the £78.0 million acquisition of The Exchange Centre, Ilford in March 2017, excluding acquisition
costs of c £1.0 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 £80 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.”
13 July 2017
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.
JSE sponsor
Java Capital
Notes to editors:
About Capital & Regional plc
Capital & Regional is a UK focused specialist retail 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 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, which comprise over 900 lettable 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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