| Wed 3 Nov 2010, 9:08 | | CSO - Capital Shopping Centres Group Plc - Interim management statement for the |
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CSO
CSO
CSO - Capital Shopping Centres Group Plc - Interim management statement for the
period from 1 July 2010 to 3 November 2010
CAPITAL SHOPPING CENTRES GROUP PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: CSO
CAPITAL SHOPPING CENTRES GROUP PLC
INTERIM MANAGEMENT STATEMENT FOR THE PERIOD FROM 1 JULY 2010 TO 3 NOVEMBER 2010
Capital Shopping Centres Group PLC today announces its interim management
statement for the period from 1 July 2010 to 3 November 2010.
David Fischel, Chief Executive of Capital Shopping Centres Group PLC, commented:
"CSC has made good progress since our interim results with continuing active
management of our centres and the fundamentals of our business remain strong.
The impact of the reduced supply of new high quality retail space is
increasingly apparent in letting negotiations. Our relationship with the major
retailers and our understanding of their space requirements has enabled CSC to
conclude a substantial number of lettings in the period. With footfall
continuing to increase on a year on year basis, we are benefiting from the trend
for retailers and consumers to focus on pre-eminent destinations in which to
trade and shop."
Highlights of the period
* Operational recovery continues - occupancy increased to 98.8 per cent (30
June 2010: 98.1 per cent)
* Positive letting activity - 104 lettings agreed since 30 June 2010,
generating an uplift of GBP3.5 million in annual passing rent. The 235 new
lettings in the year to date represent over 10 per cent of CSC`s units
* On its first anniversary, footfall for the year at the highly successful
extended St David`s, Cardiff, has been estimated at 36 million. The new
extension is now 83 per cent committed by area and income, up from 70 per
cent and approximately 65 per cent respectively on opening day
* Organic growth - continued progress with the group`s active management
projects such as the leisure and catering area remodelling and anchor store
strategy at Metrocentre, Gateshead
Operational recovery continues
* Occupancy of established centres has increased further to 98.8 per cent (30
June 2010 - 98.1 per cent). Tenant failures have continued to reduce
(tenants occupying 6 units entered administration in the quarter, first
half 2010 41 units).
* CSC has seen discernible improvement in the occupational letting market for
its high quality locations, especially in demand from retailers for larger
units where early signs of the impact of supply constraint are being seen.
The letting market for catering units remains strong.
During the period CSC has achieved 104 new lettings for GBP11.8 million
aggregate passing rent, an increase of GBP3.5 million over previous rent for
those units. As at 30 September 2010 a further 182 lettings were under offer or
in advanced negotiations for an aggregate GBP24.7 million new annual passing
rent (GBP16.6 million previous annual passing rent).
* 44 of the 104 new lettings are long-term, generating an uplift in
annual rent of GBP4 million to GBP8 million. In aggregate, these terms
are at a narrowed discount to ERV of around 7 per cent
* 53 short-term leases were signed, at passing rent in aggregate in line
with previous rent, with progress continuing to be made on securing
improved terms on short term lettings
* Footfall has remained strong during the third quarter, up 3 per cent year-
on-year for CSC`s established centres.
* A year after opening, the award-winning extension to St David`s, Cardiff,
is 83 per cent committed in line with target. The number of stores open
has more than doubled in the year to 103 including 63 retailers new to
Wales and at least ten more stores are expected to open before Christmas.
New brands recently committing to their first store in Wales include Clas
Ohlson and Jo Malone.
* At Braehead, Glasgow, our flagship shopping centre in Scotland at the heart
of CSC`s major and exemplary regeneration project, CSC has significantly
enhanced the tenant mix. Following Primark`s successful move in July to a
new 80,000 sq. ft. store in the former Sainsbury`s unit, H&M are on target
to open their new full line store in the vacated Primark unit by Easter
2011.
* A major value fashion anchor is close to exchange in the former Woolworth`s
store at Metrocentre, Gateshead, with a target opening of July 2011. Along
with the opening in September of the first combined TK Maxx/Homesense
store, this would enhance CSC`s anchor store strategy for the centre.
* Eldon Square, Newcastle, along with its neighbouring retailers in the city
centre, last week started to trade permanently extended opening hours. The
initiative met with strong support from retailers both inside and outside
the centre.
Organic growth
With 13 prime regional shopping centres including nine of the UK`s top 30, CSC
has capacity to grow organically through targeted investment in existing pre-
eminent destinations. GBP78 million of capital projects are planned in addition
to capital commitments including residual costs on projects already opened which
currently stand at GBP106 million. The following are examples of active
management projects currently underway to meet specific retailer demand:
* CSC is on target for a December 2010 handover enabling an Easter 2011
retail opening of the new Next 60,000 sq.ft. flagship store at Eldon
Square, Newcastle
* Works to extend Primark`s unit at Lakeside, Thurrock, to create a 100,000
sq. ft. anchor store are at the advanced fit-out stage, with the new store
expected to open later this month
* Vacant possession has been secured and works commenced to create an
improved catering offer on the former "fun ice" at Braehead, Glasgow
In addition, while recently announced changes by the Government have created
uncertainty in the UK planning environment, progress continues to be made in
advancing three major extensions under consideration at Victoria Centre,
Nottingham, Lakeside, Thurrock and Braehead, Glasgow. In aggregate, these could
add around 1.5 million sq. ft. of new retail space, the equivalent of a major
regional shopping centre but as extensions of existing prime locations carrying
a lower risk profile for CSC as a developer.
Property market background
National retail sales are up marginally year on year (BRC total non-food sales
+1.4 per cent). The UK property investment market has steadied in the third
quarter of 2010 after strong valuation improvements in the first half. The IPD
monthly retail index showed 0.6 per cent capital growth in the quarter with CBRE
reporting that shopping centres performed marginally better than the rest of the
sector. CBRE reports a stable yield trend for prime shopping centres at the end
of the quarter.
Financing
At 30 September 2010, CSC`s net external debt stood at GBP2.6 billion, broadly
unchanged from 30 June 2010. The GBP76 million outstanding principal on the 3.95
per cent convertible bonds was repaid in September 2010, reducing both gross
debt and cash.
International
CSC announced in May 2010 a transaction to restructure its US interests from
direct ownership of a local operation to an indirect holding in a new joint
venture with Equity One, a US retail REIT. Progress is being made in securing
the necessary regulatory, banking and tax clearances and completion is expected
in early 2011.
Prozone, CSC`s Indian joint venture with Provogue, a leading listed Indian
clothing retailer, successfully opened its first shopping centre at Aurangabad
in early October. At 800,000 sq. ft., Prozone Aurangabad Mall comprises 150
retail stores, a five-screen cinema and a family entertainment centre and is
well-located in one of the fastest growing and industrialising "Tier II" cities
in India. It has a primary catchment of 1 million middle-to high-income
consumers within a 25 minute drive and is anchored by key national retailers.
CSC`s interests in India, valued at GBP39 million at 30 September 2010, comprise
a 25% interest in Prozone and a 10% interest in Provogue.
CONFERENCE CALL:
A conference call for analysts and investors will be held today at 9.00 GMT.
A copy of this announcement is available for download from our website at
www.capital-shopping-centres.co.uk
ENQUIRIES:
Capital Shopping Centres Group PLC:
David Fischel Chief Executive +44 (0)20 7960 1207
Matthew Roberts Finance Director +44 (0)20 7960 1353
Kate Bowyer Investor Relations Manager +44 (0)20 7960 1250
Public relations:
UK: Michael Sandler, Hudson Sandler +44 (0)20 7796 4133
Wendy Baker, Hudson Sandler +44 (0)20 7710 8917
SA: Nicholas Williams, College Hill +27 (0)11 447 3030
NOTES TO EDITORS:
Capital Shopping Centres is the leading specialist UK regional shopping
centre REIT
Capital Shopping Centres Group PLC (CSC) is the leading specialist
developer, owner and manager of pre-eminent UK regional shopping centres.
CSC owns 13 regional shopping centres amounting to 14.1 million sq. ft. of
retail space and valued at GBP4.9 billion at 30 June 2010. The assets
comprise four major out-of-town centres - Lakeside, Thurrock; Metrocentre,
Gateshead; Braehead, Glasgow and The Mall at Cribbs Causeway, Bristol -
and nine in-town centres including the prime destinations in Cardiff,
Manchester, Newcastle, Norwich and Nottingham.
With a dedicated and skilled management team, CSC aims to be the landlord
of choice for retailers, to provide compelling destinations for shoppers
and to offer clarity and transparency to investors. CSC is a responsible
and environmentally conscious participant in the communities where it
invests. CSC focuses on the creation of long term and sustainable growth
in net rental income with a view to generating superior returns to
shareholders through dividend growth and capital appreciation.
CSC`s centres attracted 275 million customer visits and generated net
rental income of GBP267 million in 2009.
CSC was formerly known as Liberty International PLC. Its name was changed
in May 2010 upon demerger of its central London activities into a newly
listed company, Capital & Counties Properties PLC.
This announcement includes statements that are forward-looking in nature.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
Capital Shopping Centres Group PLC to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Any information contained in this announcement on the price
at which shares or other securities in Capital Shopping Centres Group PLC have
been bought or sold in the past, or on the yield on such shares or other
securities, should not be relied upon as a guide to future performance.
---ENDS---
3 November 2010
Sponsor:
Merrill Lynch SA (Pty) Limited
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