Capital & Regional, the UK-focused specialist property REIT with a portfolio of dominant in-town community shopping centres, managed to substantially reduce its loan to value to 40 percent in the six months to June 30, from an unsustainable 72 percent a year ago.
Shareholders appeared heartened by the big debt reduction, return to profit and resumption of dividends with an interim dividend of 2.5 pence, and the share price on the JSE surged 6.6 percent to R12.43 on the JSE early yesterday afternoon.
Chief executive Lawrence Hutchings said they had an “exceptionally productive” six months in terms of driving a strong operational performance, and in building on the restructuring of The Mall debt facility and capital raise that was completed in November.
The Blackburn sale above book value, completing the £21 million (R414bn) Walthamstow residential disposal, securing the Ilford lettings to the NHS and TK Maxx which enabled a positive loan amendment, and the acquisition of the Hemel Hempstead debt at a discount, and supported by a new debt facility, had put the company on a solid footing, said Hutchings.
He said they were buoyed by the first half performance, but were also aware of the current economic environment and inflationary pressures.
“The actions we have taken, with our well-located, affordable, needs-based community shopping centres, combined with defensive average yields and stabilising values, leave us well positioned to withstand these cyclical pressures,” said Hutchings.
Lettings were achieved at strong average premiums to passing rent which helped drive a near doubling of adjusted profit in the six month period. Rent collection had returned to pre-Covid levels.
Fifty-five new lettings and renewals were done at a combined average premium of 34.1 percent to previous rent. Two key new lettings completed include a 25-year lease agreement with the NHS for a new community healthcare centre and the upsizing and relocation of TK Maxx, both at Ilford.
Occupancy improved to 93.7 percent 92.7 percent at the end of December 2021.
There were 29 million shopper visits during the six months, with footfall up 58 percent on the first half of 2021.
Snozone’s earnings before interest tax depreciation and amortisation came to £0.8m (2021: £0.8m - including £2.5 million business continuity insurance receipt), with trading improving as the year progressed.
The plan to dispose of the investment in The Mall, Luton was expected to reach a conclusion in the next few months.
The investment in Luton had been deconsolidated resulting in an increase to net asset value of £6.8m.
In July 2022, the residential development at 17&Central community shopping centre in Walthamstow was sold to Long Harbour for £21.65m. The first phase would see 495 Build to Rent residential apartments being developed in two residential towers.
Net rental income on investment assets increased 23 percent to £12.2m, driven by improved occupancy and rent collection. Property valuations on investment assets increased by 1.7 percent to £358.5m on a like-for-like basis.
BUSINESS REPORT