TIDMCAL
RNS Number : 0202M
Capital & Regional plc
19 May 2022
19 May 2022
CAPITAL & REGIONAL PLC ("Capital & Regional" or "the
Company or the Group")
UK company number 01399411
LSE share code: CAL
ISIN: GB00BL6XZ716
LEI: 21380097W74N9OYF5Z25
Update on Trading and Property Portfolio
Capital & Regional, the UK convenience and community focused
shopping centre REIT, today provides an update on trading and
developments within its property portfolio ahead of its Annual
General Meeting this morning.
Lawrence Hutchings, Chief Executive, comments:
"Since the start of the year the Group has continued to deliver
strong operational results with footfall at almost double what it
was for the same period last year and at the highest levels since
the restrictions were put in place in March 2020. Leasing momentum
has also been maintained, above both ERV and previous rents on
aggregate.
We have also made significant progress across a number of key
initiatives, most notably with the signing of a new NHS community
healthcare centre at Ilford, which is both a first within the UK
shopping centre market and a great example of our community
shopping centre strategy. We have also now reached an agreement
with TK Maxx for a relocation and expansion of its important anchor
store, which, together with the amendments we have secured to the
loan facility, will deliver a transformation of the centre through
delivery of our Ilford community centre masterplan.
We are also pleased to have reached a resolution with the
lenders on The Marlowes Centre to acquire the debt, securing the
long-term ownership of the centre for the Group while also
delivering a significant uplift to our Net Asset Value.
While inflationary pressures across the UK economy provide a
challenging economic backdrop, we are seeing physical retail
reaffirm its important place in the retail mix and signs of a shift
in sentiment towards our sector, especially in needs based or
non-discretionary community centres. This is evidenced by the
progress we have made on specific group initiatives and a marked
increase in investment market activity, coupled with our robust
leasing and occupancy performance. These factors combine to provide
us with cause for optimism and support plans to resume dividend
payments in the second half of 2022."
Operations and trading
-- In the four months to the end of April 2022 footfall was
193.3% of the equivalent period for 2021. In total there were 18.4
million shopper visits, equating to approximately 76% of the
footfall for the equivalent period in 2019.
-- In the year to date, we have completed 34 new lettings and
renewals for a combined value of GBP1.8 million in aggregate, ahead
of previous rent and ERV.
-- At Ilford we have signed an agreement for lease with the NHS
for a new community healthcare centre on a 25-year lease term. This
will be a flagship project providing a new 20,000 sq ft
purpose-built facility that is expected to open to the public in
2024.
-- Also at Ilford, we have signed an agreement to relocate and
upsize TK Maxx into a new 35,000 sq ft store occupying the first
floor of what was the former Debenhams unit. This will enable
remerchandising of the existing TK Maxx unit which sits at the
entrance next to Ilford station, which will benefit from the
opening of the new Elizabeth Line.
-- Occupancy has remained stable at 93% at the end of April 2022.
-- Of the quarterly rent due on 25 March 2022, we have so far
received 93%. We have now received 96% of the rent due in respect
of the first quarter of the year.
-- At Walthamstow, we have now secured vacant possession of all
units required to unlock the development site and documentation
with the Local Authority to facilitate the development is agreed
and close to completion. We expect to clear the remaining
pre-conditions to enable transaction completion and release of the
land receipt of c. GBP20 million payable by our residential
partner, Long Harbour, before 30 June 2022, at which time we will
hand over the site to allow them to commence their development
programme.
-- Snozone has recovered well after the start of the year was
impacted by Government restrictions. Recent weeks' trading has
exceeded the equivalent weeks in 2019.
Property portfolio
Ilford loan amendment
The Group has signed a package of amendments to its GBP39
million secured loan facility in respect of The Exchange Centre,
Ilford, to facilitate the investment of approximately GBP10 million
for the creation of the new community healthcare centre and anchor
unit for TK Maxx.
The amendments provide for a waiver of covenants until January
2023 and improvements to existing covenant terms to apply from
January 2023 into 2024.
The amendment also provides an 18-month conditional extension
option that can be triggered at the end of 2023 to extend the loan
maturity from March 2024 until September 2025.
The Marlowes Centre, Hemel Hempstead
The Group has agreed to acquire its debt in respect of the
Marlowes shopping centre in Hemel Hempstead at a significant
discount. The Group has paid GBP11.8 million in order to settle the
loan and associated debt liabilities of c. GBP24.0 million,
representing a discount of approximately 51%.
To partially fund the transaction, the Group has substantially
agreed terms on a new loan facility of GBP4.0 million provided by
BC Invest, a subsidiary of the Group's strategic residential
partner Far East Consortium. The new debt will be provided for an
initial period of three years at a margin of 5.95%. It will be
secured on the Marlowes Centre on a non-recourse basis. The
remainder of the proceeds will be funded by existing Group cash
reserves.
The transaction will result in the Group's Net Asset Value
increasing by approximately GBP12 million, being the level of the
discount before associated costs. The asset will no longer be
classified as 'Held for Sale' following the transaction. The asset
was valued at GBP10.5 million at 31 December 2021, representing a
net initial yield of 12.5% and net equivalent yield of 18.2%.
The Mall, Luton
As detailed in the full year results the Group has been working
closely with the lender of the secured debt on the asset to explore
a disposal of part or all of the investment or asset. This process
remains ongoing and is expected to reach a conclusion before the
end of September 2022.
The Company's Annual General Meeting will be held at 10:00 (UK
time) at Thomas House, 84 Eccleston Square, Pimlico, London SW1V
1PX
- ENDS -
For further information:
Capital & Regional plc 020 7932 8000
Lawrence Hutchings
Stuart Wetherly
FTI Consulting 020 3727 1000
Richard Sunderland
Katie Hughes
capreg@fticonsulting.com
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
its portfolio of in-town shopping centres.
Using its in-house expert property and asset management platform
Capital & Regional owns and / or manages eight shopping centres
in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Redditch,
Walthamstow and Wood Green.
Capital & Regional is listed on the main market of the
London Stock Exchange (LSE) and has a secondary listing on the
Johannesburg Stock Exchange (JSE)
For further information see www.capreg.com .
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