Capital & Regional: Robust Growth and Strategic Acquisition

  • Capital & Regional reports strong H1 2023 results: Robust footfall, rent collection, occupancy, and profitability growth.
  • Acquisition of The Gyle Shopping Centre in Edinburgh: Strategic move to expand portfolio and leverage management expertise.
  • Dividend increase: Proposed 10% rise in interim dividend, reflecting company's confidence in operational and financial resilience.
By Lethabo Ntsoane

Capital & Regional (LSE: CAL), a leading UK-based Real Estate Investment Trust (REIT), has unveiled its impressive half-year results for the period ending June 30, 2023. The company’s unwavering commitment to its community-oriented retail strategy, coupled with a strategic acquisition, positions it for continued growth and resilience despite ongoing economic uncertainties.

Operational Excellence

Capital & Regional’s performance during the first half of 2023 has underscored its operational resilience and ability to thrive in challenging market conditions. The company achieved remarkable milestones, including robust footfall recovery, rent collection, and occupancy rates, demonstrating its effective adaptation to changing consumer behaviors.

Operational MetricsH1 2023H1 2022Change
New Lettings & Renewals42
Occupancy Rate94.5%94.1%+0.4%
Footfall Increase5.1%
Rent Collection98.4%
Snozone’s EBITDA£1.6M£0.8M+100%

The acquisition of The Gyle Shopping Centre in Edinburgh, valued at £40 million, serves as a strategic move to expand Capital & Regional’s portfolio. This acquisition aligns seamlessly with the company’s focus on value-oriented retail and services and presents lucrative asset management opportunities.

Financial Strength

Capital & Regional’s financial performance reflects its solid foundation and ability to deliver value to shareholders.

Financial MetricsH1 2023H1 2022Change
Like-for-like NRI Growth+13%
Adjusted Profit Growth+19%
Portfolio Valuation£329.7M£322.75M+2.1%
Net Asset Value (NAV)£183.2M£179.1M+2.3%

The company’s confidence in its financial outlook is evident in its proposed 10% increase in the interim dividend to 2.75 pence per share, showcasing its dedication to rewarding shareholders.

Strategic Acquisition

The acquisition of The Gyle Shopping Centre presents a pivotal moment for Capital & Regional as it expands its footprint and takes a significant step toward rescaling its business. The centre’s established presence and location in Edinburgh, combined with the company’s management expertise, create a promising avenue for value creation.

Lawrence Hutchings, Chief Executive of Capital & Regional, emphasized the strategic significance of the acquisition, highlighting the potential to refine the tenant mix and enhance leasing efforts to cater to the affluent catchment in south-western Edinburgh.

Outlook and Dividend Policy

Capital & Regional’s outlook remains positive as it continues to invest in repositioning and remerchandising its centres, ensuring operational excellence and tenant satisfaction. The company’s resilient performance and strategic expansion efforts have bolstered confidence in its portfolio and its ability to navigate market challenges.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: Twitter: @NtsoaneLethabo