Capital & Regional has announced its full year results to 30 December 2015 together with the £10.5m acquisition of a further property in Hemel Hempstead and the selection of Barratt London as the preferred development partner for the proposed extension of The Mall, Walthamstow to provide 92,000 sq ft of new retail space and over 400 residential units. . Capital & Regional’s EPRA NAV per share increased by 20% to 71p (December 2014: 59p) reflecting an increase in property valuations of 8% after adjusting for capital expenditure. The total shareholder return was 29.8%
They also announced a 228% increase in total dividend for 2015 of 3.12p per share compared to 2014 (0.95p per share). The Board is targeting future dividend growth in the range of 5% to 8% per annum in the medium term.
Occupancy was very strong at 97.1%, an uplift of 1.0% compared to 96.1% at 30 December 2014. Retailer sales, as measured by their in-house “C&R Trade Index”, were up 1.7% year-on-year compared to the average 2015 figure for the British Retail Consortium index (which includes on-line sales) of 0.8%. New lettings and lease renewals increased from £5.3m in 2014 to £7.8m in 2015, an increase of almost 50%. Lettings and renewals (for leases with a term of five years or more and no turnover element) were agreed at an average increase of 18.5% above ERV. Like-for-like rental income within the wholly owned portfolio increased by 7.3%, reflecting cost savings and an increase in gross income in H2.
They say lettings to leisure operators were a dominant theme in 2015, as they sought to rectify an underweight to this increasingly important element of the tenant mix, which is seen as a key driver of footfall and dwell time, as well as an anchor for other tenants. In line with this, lettings to leisure operators (including gyms, restaurants, cinemas and hotels) accounted for £2.2m or 40% of new lettings in 2015, and 8.3% of the ERV of our Mall and Redditch schemes as at 30 December 2015.
The example they is is the Travelodge at Wood Green. Originally planned as a 35 room hotel for which planning consent was achieved in October 2015, they have now agreed a lease and obtained planning for an increase in the size of the hotel to 78 rooms. This gives economies of scale to Travelodge, but is more attractive for Capital & Regional given higher per room rents for a larger hotel. This letting also highlights the dynamic approach to the management of initiatives within the Capex programme. Capex has been prioritised to support the increase in size of the hotel given the very attractive returns, helping to ensure that they outperform our 10% income return target for the programme as a whole.
At year-end, the Buttermarket Centre was valued at GBP27.9 million reflecting a gain of GBP10.8 million since acquisition over and above the GBP7.9 million of capex spent.
The acquisition they are announcing today is of a property in Edmonds Parade adjacent to a property they bought in January for £35.5m (Marlowes) property. They paid £10.5m for Edmonds Parade and will incorporate it into a wider scheme they have for Hemel Hempstead’s town centre.
CAL : Capital & Regional announces big hike in dividend