Tenant restructurings hit shopping centre owner Capital & Regional
Shopping centre owner Capital & Regional posted a drop in net rental income for last year as it was hit by retailer restructurings.
Net rental income fell five per cent to £49.3m compared to £51.9m the previous year after a £3m hit from retailer company voluntary arrangements and restructuring plans.
Adjusted profit fell 10.2 per cent to £27.4m in the year ended 30 December, Capital & Regional announced this morning.
However, the real estate investment trust (Reit) secured 66 new lettings and renewals in the year at a combined average premium of 20.9 per cent.
Since the end of the year Capital & Regional has let space to Matalan and Pure Gym, and has exchanged deals on around 16,000 sq ft of previously vacant office space.
The landlord said it will continue to target alternative use and residential property opportunities due to the “ongoing pressures” on retail real estate.
Chief executive Lawrence Hutchings said that “2019 was a critical year of progress for Capital & Regional.”
He said: “In an environment that is not without its challenges, we have continued to make good progress operationally.”
Hutchings added: “Mindful of the ongoing pressures that retail property valuations have placed on leverage we continue to actively realise value from alternative use and residential opportunities.
“Shortly after the year end we received £5m from the completion of the sale of non-core land at Wood Green and are working closely with a preferred partner for our residential plans at Walthamstow, with a view to crystallising the value of this opportunity around the end of the year.
“Of course, these types of opportunities will also benefit the centres in the future by increasing catchment and footfall.”