| Tue 17 May 2011, 8:00 | | 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 January To 17 May 2011
CAPITAL SHOPPING CENTRES GROUP PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: CSO
Issuer Code: CSCSCG
CAPITAL SHOPPING CENTRES GROUP PLC
INTERIM MANAGEMENT STATEMENT FOR THE PERIOD FROM 1 JANUARY TO 17 MAY 2011
Capital Shopping Centres Group PLC today announces its interim management
statement for the period from 1 January to 17 May 2011:
David Fischel, Chief Executive of Capital Shopping Centres Group PLC, commented:
"Since acquisition, The Trafford Centre has performed strongly and we are
pleased to have now integrated this prime asset into CSC`s business. Footfall at
CSC`s centres has remained strong with a 3% increase for the year to date which
follows similar increases in each of the last two years as customers continue to
choose to visit larger shopping centres with a wide range of attractions. We
continue to expect 2011 to be a difficult year for consumers but CSC`s overall
performance for the year to date has been in line with expectations, with
progress on lettings to improve the overall tenant mix and in its active
management and investment plans."
Highlights of the period
- Integration of Trafford Centre acquisition following completion on 28 January
2011
- Operational indicators - occupancy 97%, footfall up a further 3%
- 36 new long term leases adding GBP2 million to previous annual rent and
prominent openings improving tenant mix
- Active management projects underway across CSC`s centres
- Progress with major projects including positive public consultation at
Victoria Centre, Nottingham
Integration of The Trafford Centre
The Trafford Centre has performed strongly since the completion of this
important acquisition at the end of January 2011. Occupancy is 97 per cent (30
April 2011), with encouraging levels of interest for the 8 vacant units.
Footfall for the year to date is up 7% on the same period of 2010. Recent
openings have included the new lingerie chain Boux Avenue, Lacoste, JD
Wetherspoon and Ted Baker. The Trafford Centre`s powerful leisure and catering
offer has continued to prove attractive, with the Lego Land Discovery Centre in
Barton Square opening a second ride in April in response to the popularity of
the original destination. Reconfiguration projects to extend the stores of M&S
and Debenhams are now well under way, with the M&S store recently handed over
for fit out and anticipated to open in the autumn. Planning consent has been
secured for the enclosure of two service yard areas and proposals to enclose the
central courtyard area of Barton Square have been submitted for planning
consent.
Operational integration has taken place with CSC reorganising into two regions,
CSC London and CSC Trafford, led by Kay Chaldecott and Mike Butterworth
respectively. The Trafford team has taken responsibility for Braehead, Glasgow,
Manchester Arndale and Cribbs Causeway, Bristol. The new structure has
strengthened the group`s overall executive team and sharing of ideas across the
two regions will be to the benefit of the group as a whole. An early example of
cost savings is the achievement of significant insurance premium reductions for
The Trafford Centre by integrating its policies into CSC`s group programme.
CSC`s central construction and development team is now closely involved in
Trafford Centre active management projects.
Operational indicators
Occupancy across CSC`s centres, including for the first time St. David`s,
Cardiff, remains high at 96.8 per cent (31 December 2010 97.7 per cent). The
reduction reflects seasonal fluctuations. Some 1 per cent of CSC`s rent roll, 41
units, has entered administration since the year end, a level CSC would regard
as normal for the post-Christmas period. 13 of these units are still trading or
have been relet and a further 13 are under offer.
Footfall at CSC`s centres is up 3% year on year, a third consecutive year of
increases of this amount. Customers are continuing to choose to visit the larger
centres offering a wide range of leisure and catering attractions combined with
a strong mix of on-trend retailers.
Letting progress
Following the acquisition of The Trafford Centre, CSC has over 2,400 retail,
catering and leisure units and pro forma passing rent of around GBP370 million.
36 new long term lettings have been transacted so far in 2011 for GBP6 million
new annual rent, an increase of GBP2 million on previous rent for those units.
These lettings, which comprise a very small proportion of CSC`s overall rent
roll, were at an aggregate secured rent 11 per cent below ERV with upside from
turnover overage provisions. They include leases secured at both above and below
ERV, those below including short term lettings converting to long term leases
and a few persistent vacancies.
173 short term leases were in place at 31 March 2011 representing 2 per cent of
passing rent and 5 per cent of ERV (31 December 2010 - 202 leases representing
2% of passing rent and 7% of ERV, excluding The Trafford Centre). The reduction
is due to post-Christmas expiries and conversion to long term lettings.
The extension to St David`s, Cardiff, is now 86 per cent committed by income and
81 per cent by area (31 December 2010 - 83 per cent and 81 per cent) with a
further 7 per cent by income at the heads of terms stage or in detailed
negotiation. Five new lettings have been exchanged since Christmas including the
first Welsh stores for Mango and Krispy Kreme.
CSC`s centres continue to prove attractive locations for retailers with, for
example, Boux Avenue opening three of its six debut stores at CSC`s centres -
The Trafford Centre, Manchester, Lakeside, Thurrock and St. David`s, Cardiff.
Other lettings and openings in the period include Hobbs at Cribbs Causeway,
Bristol, Superdry at The Glades, Bromley and Ask Restaurant at The Chimes,
Uxbridge.
Active management projects
As part of the previously reported GBP128 million planned investment in active
management projects across CSC`s 14 shopping centres, much progress has been
made in the quarter including:
- planning permission has been secured for a 20,000 sq. ft roof box extension at
Lakeside, Thurrock, to create a 35,000 sq. ft. flagship store for a major US
fashion brand
- H&M has been relocated at Braehead, Glasgow, into the former Primark store.
The new flagship H&M store opened earlier this month and enabling works have
commenced in their vacated unit to create a new flagship store for Hollister
expected to open summer 2011
- in Newcastle, Next completed the move from Northumberland Street into Eldon
Square with their impressive new 65,000 sq. ft flagship store opening last week
creating a major frontage onto Blackett Street and Newgate Street
- amalgamation works have started at Braehead, Glasgow, to create a 6,000 sq.
ft. store for a major US brand, expected to open autumn 2011
- the conversion of the former Fun Ice at Braehead, Glasgow, into four new
catering units is well advanced with opening expected next month
- planning consent has been secured for two additional units on the retail park
at Braehead, Glasgow
- plans are being drawn up for the creation of five new catering units in
Queen`s Gardens at The Glades, Bromley with a view to submitting a planning
application in the third quarter
Progress with major projects
We continue to make good progress with major plans for Victoria Centre,
Nottingham, Lakeside, Thurrock and Braehead, Glasgow as follows:
- In Nottingham, a favourable view was expressed on the planned extension of the
Victoria Centre by the overwhelming majority of respondents to March`s public
consultation and exhibition and we intend to submit the planning application
this quarter
- At Lakeside, work continues on preparing detailed proposals for an extension
with a view to submitting a planning application later in 2011
- At Braehead, we continue to work with the local authority in the development
of a master plan for the wider area which should lead to increased economic
activity and job creation
Once implemented, these plans could create in aggregate 1.4 million sq. ft. of
new retail space for an investment of around GBP500 million with an expected
stabilised initial yield on cost of 7 - 8.5%.
CSC recognised as UK`s top shopping centre investment manager - Trevor Wood
Associates
CSC was recognised as the leading investment manager for shopping centres in the
UK by the Trevor Wood Associates` Definitive Guide to Shopping Centres 2011
published last month. Reinforcing the strength of the CSC portfolio, the survey
placed three of CSC`s centres in the top six, five centres in the top ten and
ten centres in the top 30. The success of the recent redevelopment of St
David`s, Cardiff, has propelled the centre into the top ten.
Property valuations
CSC has not conducted a valuation of its shopping centres since 31 December 2010
- the next independent valuation will be undertaken on 30 June 2011 and
published with the first half results on 2 August 2011.
The retail property investment market has been characterised in the quarter by a
limited supply of prime assets and, with valuation yields at a historically high
spread over gilts, good demand for such assets. This has supported slightly
tightening yields for the best assets. While banks in particular have been
careful in releasing secondary assets to the market, the expectation of
increased supply and the reduced availability of debt for such assets have led
to increased polarisation of the market. IPD UK monthly index (retail) showed
0.8 per cent capital growth in the first three months of 2011.
Financing
At 31 March 2011 net external debt was GBP3.2 billion and the debt to assets
ratio was 47%, in line with the pro forma published following the acquisition of
The Trafford Centre and within CSC`s stated target range of 40 to 50 per cent.
The planned debt repayments and interest rate swap terminations at a total cost
of around GBP40 million arising from and discussed at the time of the
acquisition are now largely complete.
Conference call
A conference call for analysts and investors will be held today at 9.00 BST.
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
17 May 2011
Sponsor:
Merrill Lynch SA (Pty) Limited
NOTES TO EDITORS:
Capital Shopping Centres is the leading specialist UK regional shopping
centre REIT
Capital Shopping Centres Group PLC (CSC) is the UK`s leading specialist
developer, manager and owner of pre-eminent regional shopping centres. With
a portfolio of 14 centres representing 16 million sq ft of retail space and a
valuation of GBP6.7 billion CSC`s assets attract well over 300 million
customers a year.
CSC`s assets now comprise five major out-of-town centres including four of
the UK`s top six - Trafford Centre, Manchester; Lakeside, Thurrock;
Metrocentre, Gateshead; Braehead, Glasgow and The Mall at Cribbs Causeway,
Bristol - and nine in-town centres including centres in prime destinations
such as Cardiff, Manchester, Newcastle, Norwich and Nottingham.
With a dedicated and skilled management team CSC aims to be the landlord of
choice for retailers and to provide compelling destinations for shoppers. It
is a responsible and environmentally conscious participant in the communities
where it invests.
In April 2011 CSC was recognised as the UK`s Top Shopping Centre Investment
Manager in Going Shopping 2011 -- The Definitive Guide to Shopping Centres
published by Trevor Wood Associates.
For further information see www.capital-shopping-centres.co.uk
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.
Date: 17/05/2011 08:00:08 Produced by the JSE SENS Department.
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