Capital & Regional is looking to buy a shopping centre in Scotland to add to its portfolio of community shopping centres in the UK, with the help of its majority shareholder, SA property company Growthpoint.
The company, valued at about R2.3bn on the JSE, said on Thursday that it had entered into an agreement to buy The Gyle Shopping Centre in Edinburgh for £40m, which will be partly funded with an equity raise of about £25m and a new debt facility.
“Through this acquisition we are able to capitalise on an opportunity to add an established dual supermarket anchored community centre in Scotland’s capital city to our portfolio,” CEO Lawrence Hutchings said in its results for the six months to end-June.
Opened in 1993, the area of The Gyle is around 38,550m², the size of about 5.5 soccer pitches, and built on a 50-acre site in Edinburgh. It comprises 88 retail units and is anchored by a Marks & Spencer store and Morrisons supermarket.
In 2022, 8.6-million shoppers visited the property located about 10km from the city centre and currently has an occupancy rate of 94%.
The real-estate investment trust (Reit), in which Growthpoint has a 61.5% stake, upped its interim dividend by a tenth year on year to 2.75p, while footfall at its portfolio of community shopping centres in the UK continues to recover to pre-Covid-19 pandemic levels.
In 2019, Growthpoint took a controlling stake in the Reit, which owns shopping centres in Hemel Hempstead, Ilford, Luton, Maidstone, Redditch, Walthamstow and Wood Green.
Footfall was up 5.1% to 19.3-million shoppers, equalling 86.7% for the same period in 2019, before the pandemic hit. The occupancy rate has advanced 0.4 percentage points over the past six months to 94.5%.
“Our footfall recovery, rent collection, occupancy and leasing metrics continue to benefit from our ongoing investment into repositioning and remerchandising our centres, coupled with our continued focus on operations,” Hutchings said.
This was despite the UK economy and shoppers being hamstrung in recent times by high inflation and interest-rate hikes.
Despite this, adjusted profit, which excludes the revaluation of properties and financial instruments, gains or losses on disposal and other non-operational items, jumped close to a fifth to £7m.
Like-for-like net rental income rose 13%, driven largely by improved occupancy rate and rent collection, but total net rental income was down 4.9% year on year to £11.7m. Net asset value (NAV) per share, used to assess the value of a Reit, remained flat at 106p.
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