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Trading statements

Capital & Regional occupancy remains high

13 July 2017 07:39

Capital & Regional, the UK focused retail property REIT, specialising in dominant community centres, expects continued growth in rental income with further capex driven gains in the second half.

Like-for-like passing rent was £53.9 million at 30 June 2017, up £0.9 million or 1.7% from 31 December 2016.

It said £1.1 million of additional annual rent was 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 were handed over, providing further evidence of the growth in income driven by its accretive capex programme and specialist asset management platform.

Total passing rent at 30 June 2017 was £59.9 million benefiting also from the acquisition of The Exchange Centre, Ilford that completed in March.

It said occupancy remained high at 95.5% at 30 June 2017, marginally ahead of December 2016 (95.4%).

It added: "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 of 8.4%, equating to an uplift on the previous passing rent of 21%."

Chief executive Lawrence Hutchings said: "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."

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Related Company: CAL

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