Capital & Regional will continue to reduce its exposure to fashion and offer a more diversified range of products amid the UK retail crisis.
The UK convenience and community focused shopping centre REIT, which has a £1bn portfolio, said it earned £3.3m in H1 2018. During the period, it completed 21 new lettings and 23 lease renewals.
Chief executive Lawrence Hutchings said: “Our strong letting progress and footfall performance demonstrate that our community shopping centre strategy, focussing on “needs-based” and non-discretionary offers, is resilient against the backdrop of a challenging first half of 2018 for the retail sector.
“The first six months of 2018 has reinforced our view that the structural changes taking place in physical retailing continue to create polarisation in retail venues with our type of community shopping centres at one end and destination centres at the other.
“By reducing our exposure to fashion and offering a more diversified range of products and services in conveniently located, welcoming and vibrant environments, we are positioning the business for long term success.”
He added that the business was in the process of re-merchandising its space and talking to customers to ensure each centre is “carefully tailored to its local community”.
Leasing highlights include Bodycare and Smiggle in Blackburn, four floors of office space in Luton, and KFC and Muffin Break in Maidstone.
Occupancy was 96.9% at 30 June 2018, marginally below the December 2017 equivalent of 97.3%, which the company said benefits from the peak Christmas trading, and ahead of June 2017 which was 95.5%.
The valuation of the wholly-owned portfolio at 30 June 2018 was £883.4m, reflecting a net initial yield of 6.04%. This represents a fall of £3.2m or 0.4% from December 2017.
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