UK shopping centre owner Capital & Regional has reported a 17% rise in net rental income at the halfway stage as strong demand from retailers for space at its shopping centres remained steady, especially in London.
Net rental income for the six months to end-June rose to £13.7m from £11.7m a year ago, reflecting the affect of the Gyle acquisition that has been integrated into the portfolio with a 21% increase in statutory revenue to £34.5m.
The group reported adjusted profit rose 17% to £8.2m. Net asset value increased to £203.9m from £202m at the end of December.
An interim dividend of 2.85 pence per share was proposed.
It said a further £1m of contracted rent was due to convert to passing rent in the next 12 months as occupiers’ rent-free periods ended.
“Against what at times has been a challenging economic backdrop, our team has been able to capitalise on the continued strong levels of demand from retailers for space within our centres, particularly those in London. This is reflected in the strong leasing momentum we have maintained,” said CEO Lawrence Hutchings.
During the period, the group invested a net £3.1m, including completion of the new NHS community healthcare centre in Ilford that opened in May and the remerchandising of the former WH Smith in Wood Green, creating new units for Pure Gym, Wendy’s and Wingstop that have opened in recent weeks.
The first phase of the Walthamstow residential development was undertaken by Long Harbour, creating 495 build-to-rent apartments in two residential towers and providing a new captive audience of shoppers for its Walthamstow centre. The development is entering its final stages and due for completion in early 2025.
“Over the six months to the end of June, not only did we complete more lettings and renewals than over the same period last year, we also achieved these at both a higher average rent per lease and average premium to the previous rent,” he said.
“We also continue to make significant progress on our repositioning master plan in Ilford where we have agreed terms on two major leases encompassing 44,000 square feet of floor space, generating approximately £0.5m of additional income. The expanded and relocated TK Maxx is trading well and our NHS community healthcare centre is now open on the upper level,” he said.
In May, Capital & Regional confirmed that its majority shareholder, Growthpoint Properties, had received a preliminary expression of interest from NewRiver Reit about a possible offer in cash and shares for the entire issued share capital of Capital & Regional.
On July 19, Praxis Group announced it was in the early stages of considering whether to make a cash offer for Capital & Regional.
The company confirmed that it had received an expression of interest from Praxis and was complying with its obligations in providing access to due diligence information to enable Praxis to evaluate a possible offer for the company.
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