The UK-focused specialist real-estate investment trust reports strong consumer demand at its malls.
Capital & Regional, the UK-focused specialist real-estate investment trust (Reit) with a portfolio of dominant in-town community shopping centres, grew its dividend 8.7% over the year to December.
The group, which released financial results for the year to December,
said on Thursday that it had seen strong consumer demand at its malls.
Its dividend increased to 3.39p a share for 2016, ahead of guidance.
"While the business environment may be challenging, the prospects for Capital & Regional are exciting. Our assets have proven to be very resilient and capital expenditure investment over the past two years has provided a strong platform for future income growth," said CEO Hugh Scott-Barrett.
"This, supported by the high demand we continue to see from occupiers for the attractive and affordable space in our vibrant centres, provides us with confidence in our ability to maintain and grow the dividend," he said.
Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. It also has a 20% joint venture interest in the Kingfisher Centre in Redditch.
The group manages these assets, which comprise about 820 retail units and attract about 1.7-million shopping visits a week, through in-house property and asset management.
"We expect to benefit from the average 13.5% reduction in rateable values when they are applied next month and our portfolio of asset management initiatives continues to grow with leisure reconfigurations providing an opportunity to reposition both the Hemel Hempstead and Ilford schemes," Scott-Barrett said.
Dividend Momentum
The group’s asset management strategy involved driving
strong income growth and underpinning the momentum in its dividend.
Capital & Regional also achieved a 6.7% increase in net rental income to £52.6m from 2015’s £49.3m.
Adjusted profit was up 11.7% to £26.8m from 2015’s £24m.
Market sentiment around Capital & Regional and other UK-based JSE-listed real estate companies has been negative in recent months following the Brexit vote. The pound returns received as dividends by South Africans from such firms have also been under pressure from a stronger rand.
Capital & Regional was among the worst performers in 2016, with a negative 39.81% total return.
"While the business environment may be challenging, the prospects for Capital & Regional are exciting. Our assets have proven to be very resilient and capital expenditure investment over the past two years has provided a strong platform for future income growth," said CEO Hugh Scott-Barrett.
"This, supported by the high demand we continue to see from occupiers for the attractive and affordable space in our vibrant centres, provides us with confidence in our ability to maintain and grow the dividend," he said.
Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. It also has a 20% joint venture interest in the Kingfisher Centre in Redditch.
The group manages these assets, which comprise about 820 retail units and attract about 1.7-million shopping visits a week, through in-house property and asset management.
"We expect to benefit from the average 13.5% reduction in rateable values when they are applied next month and our portfolio of asset management initiatives continues to grow with leisure reconfigurations providing an opportunity to reposition both the Hemel Hempstead and Ilford schemes," Scott-Barrett said.
Dividend Momentum
The group’s asset management strategy involved driving
strong income growth and underpinning the momentum in its dividend.
Capital & Regional also achieved a 6.7% increase in net rental income to £52.6m from 2015’s £49.3m.
Adjusted profit was up 11.7% to £26.8m from 2015’s £24m.
Market sentiment around Capital & Regional and other UK-based JSE-listed real estate companies has been negative in recent months following the Brexit vote. The pound returns received as dividends by South Africans from such firms have also been under pressure from a stronger rand.
Capital & Regional was among the worst performers in 2016, with a negative 39.81% total return.
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