Capital Shopping Centres returns to profit

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Capital Shopping Centres, the newly formed shopping centre business of the demerged Liberty International, has reported the return of good demand from retailers for its stores in its first set of results.

Capital Shopping Centres H1 2010 interim results
RevenuePre-tax profitEarnings per shareDividend
£205m£291.2m5p
↓ 0.3%(loss of £495.1m)

The company said that net asset value per share rose 9 per cent to 368p in the first half of the year, on the back of a 6 per cent rise in the value of its £4.9bn ($7.78bn) portfolio, which includes shopping centres such as Lakeside in Thurrock and Metrocentre in Newcastle.

The company said the leasing environment was getting easier after the recession, when many retailers stopped taking new space. Although like-for-like net rental income still fell by 0.4 per cent, CSC said that this was an improvement on the 3.4 per cent drop in 2009 and recent lettings had beaten expectations.

Occupancy remained high at 98 per cent and the company completed 131 lettings during the period, generating a rental increase of £4m. These lettings were made at 16 per cent below estimated rental values, but the company said that lettings agreed in recent months had been at higher levels.

David Fischel, chef executive, said: “The retail market is up and running again, and the balance has shifted again towards the landlord. We have competition on some of our shops again. Our recent lettings have been near estimated rental values, or even above at Lakeside.”

The company is looking to drive growth in net rental income from lettings, lease expiries and rent reviews, with a particular focus on converting last year’s short-term lets into longer-term lets at higher rents.

The company returned to profit in the first half period, reporting a pre-tax profit of £291.2m, from a loss of £495.1m last year, owing to the increase in valuation of its property portfolio. Underlying earnings rose 28 per cent to £43m. The interim dividend per share will be unchanged at 5p.

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