Capital & Regional sees shopping centre value plunge
Shopping centre owner Capital & Regional’s net asset value (NAV) has plummeted 58%, after the Covid-19 pandemic inflicted “significant pressure on our income, valuations and therefore leverage”.
NAV at the end of last year was 150p, down on 361p the previous year, while net debt increased to £345m – around 65% of the firm’s portfolio value.
Chief executive Lawrence Hutchings said the pandemic had sped up “the underlying long-cycle structural shift in the sector and, in some cases, distorting the balance between physical and online retailing”.
Shopping centre owner Capital & Regional’s net asset value (NAV) has plummeted 58%, after the Covid-19 pandemic inflicted “significant pressure on our income, valuations and therefore leverage”.
NAV at the end of last year was 150p, down on 361p the previous year, while net debt increased to £345m – around 65% of the firm’s portfolio value.
Chief executive Lawrence Hutchings said the pandemic had sped up “the underlying long-cycle structural shift in the sector and, in some cases, distorting the balance between physical and online retailing”.
Net rental income fell by nearby one-third to £34.1m, while IFRS losses mounted from £121m in 2019 to £203.4m. Earnings per share fell to 9.5p from 36.7p the previous year.
It comes after the firm announced yesterday that it had signed a deal which could see its car parks and shopping centres turned into urban farms, neighbourhood kitchens and fulfilment centres.
Reef Technology, which was founded in Miami and is backed by SoftBank, has been charged with finding alternative uses for parts of Capital & Regional’s malls in Luton, Bedfordshire, and Wood Green, N22. Discussions are also under way concerning malls in Walthamstow and Ilford.
Reef’s portfolio in the US and Canada spans more than 4,500 locations and 200 cities. In November, the company secured $700m from a syndicate of investors including Japan’s SoftBank Vision Fund and the Abu Dhabi state fund.
Hutching said the combination of its community centre strategy and focus on local destinations “has never been more relevant”.
“The plans announced by the government on 22 February 2021 provide a roadmap for an easing of restrictions including, most critically for our business, the prospect of non-essential retailers being able to reopen in mid-April.
”We have seen an encouraging bounce-back in trading at those times during the last year when restrictions were eased.
“This coupled with having achieved leasing volumes in 2020 equivalent to those in 2019 and at average premiums to passing rent and ERV, together with our strong levels of rent collection, further reinforces our confidence in our community centre strategy.
“We look forward to the return to a more normalised trading environment when we will be able to better assess the retail landscape and the needs of the business.”
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