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CAPITAL & REGIONAL PLC - Trading update and notice of interim results

Release Date: 17/07/2018 08:00
Code(s): CRP     PDF:  
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Trading update and notice of interim results

(Incorporated in the United Kingdom)
(UK company number 01399411)
LSE share code: CAL JSE share code: CRP
LEI: 21380097W74N9OYF5Z25
ISIN: GB0001741544
("Capital & Regional" or "C&R" or "the Company")


Capital & Regional, the UK convenience and community focused shopping centre REIT which has a
c. £1 billion portfolio, today announces a trading update for the first half of 2018, prior to its half year results
announcement which will follow on 14 August 2018.

Lawrence Hutchings, Chief Executive of Capital & Regional, said:

"Our strong letting progress and footfall performance demonstrate that our community shopping centre
strategy, focussing on 'needs'-based and non-discretionary offers, is resilient against the backdrop of a
challenging first half of 2018 for the retail sector. We are remerchandising our space, investing in our properties
and talking to our customers to ensure that each centre is carefully tailored to its local community. By reducing
our exposure to fashion and offering a more diversified range of products and services in conveniently located,
welcoming and vibrant environments, we are positioning the business for long term success.

"The first six months of 2018 has reinforced our view that the structural changes taking place in physical
retailing continue to create polarisation in retail venues with our type of community shopping centres at one
end and destination centres at the other. We continue to believe that community shopping centres are ideally
placed to provide the critical point where product meets people and play an increasingly integral role in the
new retail landscape through click and collect and store to customer delivery. This, allied to the expertise of
our recently strengthened in-house management team, continues to underpin our confidence in the further
development and growth of the C&R business."


   -   The first half of 2018 saw 37.9 million shopper visits across our wholly-owned portfolio, representing
       like-for-like growth of 1.7% and another period of considerable outperformance of the national index
       which was down 3.4%.
   -   The relevance of our centres in the omnichannel trading environment was demonstrated by growth in
       Click & Collect transactions in the first half of the year, up 35% year on year.


   -   We completed 21 new lettings and 23 lease renewals in the first half of 2018 totalling £3.3 million in
       contracted income, at a combined premium to ERV(1) of 3.3%, equating to an uplift on the previous
       passing rent(1) of 3.4%.
   -   Leasing in the period reflected our strategy of remerchandising to diversify uses and tenant mix with
       notable lettings including Bodycare and Smiggle in Blackburn; four floors of office space in Luton and
       KFC and Muffin Break in Maidstone. At Walthamstow, Pret is fitting out one of the last two remaining
       units from the former BHS space and in Maidstone we are in advanced discussions with a national
       retailer to take the 65,000 sq ft former BHS unit, which will effectively complete the reletting of all of
       the four former BHS units across the portfolio.


    -   Occupancy remained high at 96.9% at 30 June 2018, marginally below the December 2017 equivalent
        of 97.3%, which benefits from the peak Christmas trading, and ahead of June 2017 which was 95.5%.

Capex progress

    -   We have invested £6.7 million of capex in the first half of 2018 on projects to remerchandise and
        reposition our assets. We are currently on site to further improve the guest services at Ilford and at
        Hemel, where we will also shortly be commencing work on a new family area and recladding external
        units. There are currently over 20 different projects live across the portfolio driving improvements in
        our centre facilities and fuelling future growth.

Property valuations

    -   The valuation of the wholly-owned portfolio at 30 June 2018 was £883.4 million, reflecting a net initial
        yield of 6.04%. This represents a fall of £3.2 million or 0.4% from December 2017.
    -   In total the revaluation loss, net of the capex spend in the period and the impact of joint ventures, is
        £12.1 million, equivalent to approximately 1.7p of Net Asset Value per share.

Further information will be provided when Capital & Regional announces the Company's half year results for
the six months ended 30 June 2018 on Tuesday 14 August 2018. An analyst presentation will be held at 9.00
a.m. on the day and this will also be accessible via a conference call and webcast. Please contact FTI Consulting
at for more information or to register attendance.

(1) For lettings and renewals (excluding development deals) with a term of five years or longer and which did
not include a turnover element.

17 July 2018

JSE sponsor
Java Capital

Notes to editors:

About Capital & Regional plc

Capital & Regional is a UK focused retail property REIT specialising in shopping centres that dominate their
catchment, serving the non-discretionary and value orientated needs of the local communities. It has a strong
track record of delivering value enhancing retail and leisure asset management opportunities across a
c. £1 billion portfolio of in-town 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 through its in-house expert property and asset management platform.

For further information see

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