TIDMCAL
RNS Number : 3369Z
Capital & Regional plc
17 May 2019
17 May 2019
UK company number 01399411
LSE share code: CAL
ISIN: GB0001741544
LEI: 21380097W74N9OYF5Z25
CAPITAL & REGIONAL PLC ("Capital & Regional" or "the
Company")
Trading Update
Capital & Regional, the convenience and community focused
shopping centre REIT, today announces an update on current trading
for the four months to the end of April 2019, following its Annual
General Meeting held on Thursday 16(th) May.
Lawrence Hutchings, Chief Executive commented: "We continue to
see solid progress in executing our strategy to reposition our
community centres to focus on needs based and less discretionary
goods, especially in our London and South East assets. We firmly
believe that our repositioning and remerchandising plans, low
average rents and high footfall metrics, differentiates our centres
and ensures they remain relevant, profitable and attractive to
retailers as the structural changes in physical retailing continue
to evolve.
"The strength of our leasing activity last year and the level of
committed and pipeline deals during the first four months of 2019,
provides further evidence of the continuing relevance of our
centres and the quality of our platform and team members. We
believe our management capability is a valuable asset in the
current environment.
"Clarity around Debenhams is welcome news, enabling us to plan
our capex and remerchandising proactively. In addition, we continue
to take forward plans to unlock the underlying value of our real
estate through mixed use development rights above and immediately
adjacent to our centres."
Trading update
Strong leasing momentum supporting high occupancy
-- The Company completed 20 leasing transactions in the first
four months of the year at an average premium to passing rent of
3.0% and 5.2% to ERV(1) , comprising 8 new lettings and 12 renewals
for a combined annual income of GBP1.2 million.
-- Notable transactions completed in the last month include the
letting of the final two floors of the Arndale House office to the
council and terms agreed with Tesco for a 10 year lease renewal,
both in Luton. Leasing transactions have also been completed with
Vodafone, The Entertainer and Wenzels the baker in the period.
-- In addition, we have a strong leasing pipeline with 30
transactions currently agreed or in solicitors' hands for new
lettings or renewals representing over GBP2 million of annual
income.
-- Occupancy has remained robust at 96.7% as at 30 April 2019.
This excludes Hemel Hempstead where we have taken back space to
allow work to commence in preparation of the leisure development,
following the 25 year lease we agreed with Empire Cinemas in
February.
Continued footfall outperformance driven by success of community
repositioning strategy
-- Once again footfall across our wholly owned portfolio
significantly outperformed the national index with our three London
centres increasing by 1.8%. There were 24.6 million visits across
the wider portfolio, reflecting a marginal decline of 0.6% over the
same period last year, but well ahead of the national index, which
was down by 3.2% in the first four months of the year.
-- Footfall performance remained strongest at centres where we
are most advanced in delivering our community centre strategy
through capex and repositioning. In total we have added over
900,000 shopper visits in the 16 months since we launched our
strategy in December 2017.
Further clarity on Debenhams
-- While none of the three stores in the Company's portfolio
were amongst the 22 that Debenhams announced were due to close
early next year, the Company Voluntary Arrangement ("CVA") that was
approved in May 2019 is expected to result in an impact on 2019 Net
Rental Income of approximately GBP0.7 million and GBP1.3 million on
an annualised basis.
-- We are encouraged by the leasing momentum across the
portfolio which underlines the appeal and affordability of our
centres, as well as the expertise of our asset management teams and
have been proactively planning for a number of contingencies with
regards to capex and remerchandising at the centres which are
impacted. We will now consider how and when is appropriate to take
these plans forward.
Residential strategy leverages unique town centre locations
-- We have received a significant level of interest in our
residential pipeline of up to 1,000 apartments over our three
London locations, of which 650 have planning consent. We continue
to progress works to enable us to create value and deliver
valuation uplift through partnerships with residential operators in
the private sale and private rented sectors.
Continued strong performance at Snozone
-- After seven consecutive years of profit growth, Snozone has
once again seen a strong first quarter, providing the Company with
confidence that this track record will continue. Snozone has proven
to be valuable contributor to the business, both in terms of
profitability and cash flow and we are exploring ways of further
leveraging its highly skilled and experienced leisure focused
management platform.
(1) For lettings and renewals (excluding development deals and
leases impacted by CVA's) with a term of five years or longer and
which did not include a turnover element.
- ENDS -
For further information:
Capital & Regional plc 020 7932 8000
Lawrence Hutchings
Stuart Wetherly
FTI Consulting 020 3727 1000
Richard Sunderland
Claire Turvey
Methuselah Tanyanyiwa
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. GBP0.9 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. Capital & Regional manages these assets through its
in-house expert property and asset management platform.
For further information see www.capreg.com.
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END
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