The value of Capital & Regional’s property portfolio dropped by 6.8% in the first half of 2019 to £797.3m, the company said its trading update this morning.
The decline reflected an 11% reduction in regional asset values and a 3% reduction in the three London assets.
However, the company reported encouraging leasing momentum across its portfolio, with 44 new lettings and renewals during the period totalling £3.1m in rental income
Its contracted rent, while down 1.9% compared to last year to £61.1m, meant that the company’s new letting activity has gone a long way to offsetting the impact of CVAs and administrations.
The company said it had completed non-core disposals over the period, including the sale of land at Wood Green for £5m, in line with the book value.
It also said it had received “strong interest from both build to rent and develop to sell operators to establish a partnership to fully fund and develop out a c.450-home scheme that was consented in the second half of 2018. Capital & Regional expects to select a partner later this year.
Following the fire at its Walthamstow shopping centre last month, the first stores have now reopened with further openings planned over the coming weeks for circa 75% of the stores.
Lawrence Hutchings, CEO of Capital & Regional said: “I am pleased that the drive and energy of our team has enabled us to present a robust set of operational results in what has been a challenging period for UK retail. Our belief that our focus on Community Centres, which provide non-discretionary and needs based products and services, are best placed to counter the effects of structural changes in the retail sector and slowing in consumer spending, is borne out by the Company’s ongoing operational performance. Our London weighting together with affordable rents, averaging £15 psf, are a key advantage and this provides a base for us to remerchandise our centres assertively as the leasing performance indicates.
“The progress on Walthamstow both in terms of re-opening the centre and in selecting a residential partner, where we have seen strong interest and bidding, to deliver the consented residential scheme is testament to the quality of our assets and our approach to unlocking value. Likewise, the decision to unlock value by selling the residential site at Wood Green to an experienced developer is appropriate at this point.”