Capital & Regional has revealed an increase of 76 per cent in operating profit to £11.8 million in the first half of the year, significantly outperforming the £6.7 million taken during the same period last year.
Capital & Regional currently controls a portfolio of six fully owned shopping centres in the UK, along with a 20 per cent joint venture interest in the Kingfisher Centre in Redditch. During the period it also acquired a 50 per cent stake in Ipswich’s Buttermarket Centre for £9.2 million, and has already gained planning permission for a reconfiguration of the development.
Thanks to this acquisition, along with a number of improvement works at other fully owned centres, the firm’s shopping centre portfolio rose in value to £958.2 million, equating to a value of £827.7 million when Capital & Regional’s share alone is taken into account. This marks a valuation uplift of £51.8 million and helped to reduce the see-through net debt to property value to 43 per cent.
Chairman of Capital & Regional, John Clare, believes that the firm’s management has played a huge part in the impressive growth recorded during the first half.
He says; “Capital & Regional has made a strong start to its first year as a specialist UK shopping centre REIT.
“Our hands-on approach to asset management, combined with improving economic conditions for our retailers and leisure operators, have driven both letting and occupancy across our portfolio.
“This provides a sound platform to deliver future growth through the capital expenditure programme supporting our existing portfolio, as well as through the acquisition of retail assets where we can see potential to grow income, such as the Buttermarket Centre in Ipswich.”
The numerous improvements made at many of Capital & Regional’s UK centres have also contributed significantly in the 2.1 per cent elevation of the portfolio’s occupancy rate to 96.4 per cent, as 26 new deals totalling £1.5 million were signed during the first half of the year. In addition, £0.8 million worth of lease renewals were completed in the period, with rents for all transactions significantly above estimated rental value (ERV).
Looking ahead, Capital & Regional will continue to focus upon improvement works following the completion of the £3 million refurbishment at its Walthamstow centre towards the end of the first half. The works at the Buttermarket Centre, for example, are well underway with construction workers currently on-site, and a number of pre-lets are either signed or in the hands of solicitors, meaning that around 80 per cent of units in the redeveloped scheme are already spoken for.
Finally, Capital & Regional has confirmed that the commencement of a £5 million upgrade project in its Maidstone centre will take place during the current quarter, which is expected to complete before June 2016.
As a result of the strong first half performance the board of Capital & Regional has approved an interim dividend of 1.5p per share.
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