Capital & Regional, the UK focused REIT that owns in-town community shopping centres, lifted its final dividend 7.3% to 2.95p per share in the period to December 31 as it continued to benefit from evolving retail trends in the UK.
The company, 70% owned by South Africas Growthpoint Properties, said it had lifted like-for-like net rental income by 5% in the year to December 31, while valuations increased 2.6%.
'The structural changes in retail continue to evolve, with online penetration now maturing and a continued return to the store by consumers meaning physical retail has cemented its position as a vital part of the distribution framework.
This is especially evident in our core categories of value and non- discretionary merchandise. Retailers continue to focus on coupling the online platform with stores in a seamless guest experience, said the chief excutive, Lawrence Hutchings.
There were 86 new lettings and renewals, compared to 80 in 2022, at a combined average premium of 6.8% to previous rent and 16.6% to expected rental value.
The Gyle shopping centre, in Edinburgh, was acquired in September for 40 million (R932m), part funded through a 25m equity raise.
Adjusted earnings a share grew 9.7% to 6.8p from 6.2p.
'Our focus on delivering our proven community strategy and increasing our exposure to non-discretionary and needs based retail and services categories, continues to support our progress and has helped us deliver another positive set of results, said Hutchings.
He said occupier demand coupled with an accretive capital expenditure programme had driven rental growth and underpinned a 9.7% increase in earnings and, with values also up slightly, had provided the group with the confidence to increase the dividend.
He said the rapid re-leasing of all three of their Wilko units to B&M in the first few months of 2024, showed the quality of their locations, the relevance of the strategy and their team's ability to capture demand from retailers for affordable space in urban locations.
The Gyle acquisition in September marked the first step towards rebuilding the business through a continued capital expenditure programme and a disciplined approach to opportunities.
In terms of operational metrics, group footfall was up 1.5% with 44.5 million shopper visits in 2023, representing 86.7% of the sme period for 2019, before the pandemic.
Occupancy was steady at 93.4% (December 2022: 94.1%) with the marginal decline due to Wilko's administration.
All three units vacated following Wilko's administration was re-let post year end, with B&M signing a portfolio deal in February and opening this month, adding 140 basis points to occupancy.
In the three months to the end of March 2024 we have completed 21 new lettings, said Hutchings.
Snozone's earnings before interest taxation depreciation and amortisation increased by 64% to 2.3m, reflecting the first full year not impacted by Covid since 2019, and improved profitability from Snozone Madrid driven by the actions undertaken since the acquisition in 2021.
The first phase of the Walthamstow residential development undertaken by Long Harbour, creating 495 build-to-rent apartments in two towers and providing a new audience of shoppers for Walthamstow centre, was progressing rapidly and was due to complete in early 2025.
Group loan to value had increased to 43.6% from 40.6%, from investing cash into capital expenditure and part funding of the Gyle acquisition from central cash.
