Capital Shopping Centres has posted “slightly weaker than expected” full-year results with an adjusted net asset value of 391p a share.
This is an increase of just 1p on the same time last year and below analyst JP Morgan Cazenove’s expectation of 399p.
The modest NAV rise was the result of weaker capital growth in the second half of the year, when the market values of CSC’s investment properties fell by 0.5% after gaining 1.2% in the first half of 2011.
While overall valuation growth was flattish, the Trafford Centre rose in value by 3%, Lakeside by 1%, Braehead 1% and its joint venture with Land Securities in Cardiff by 3.7% in the second half.
However, Metrocentre was -1%, The Harlequin -7%, Eldon Square -2% and The Potteries -7% over the same period.
Overall, the value of CSC’s portfolio, which comprises 14 shopping centres including the recently acquired Trafford Centre, increased by £63m. Its net assets stood at £3.5bn at the year end.
This compares with a £497m gain in 2010, and meant that profit fell to just £34m in 2011 compared with £529m last year.
The shopping centre giant’s estimated rental values fell 2% in the year, largely in the second half, bringing the total reduction from its peak to 8%.
The group completed 198 long-term lettings during the period, increasing annual rent by £11m to £35m.
The new rent on long-term lettings was agreed at an average 4% discount to ERV, and just a 2% discount in the final quarter of the year to 31 December.
In November the group was criticised by analysts over concerns that its portfolio was overvalued based on lettings evidence – including some deals at an average 10% discount to ERV.
CSC has a LTV ratio of 48%, with net debt of £3.4bn.
It has proposed a 10p final dividend, taking its annual payout to 15p, in line with last year’s figure.
Chief executive David Fischel said: “The results demonstrate CSC’s considerable progress in 2011.
“The transformational Trafford Centre acquisition has driven our strong performance and has exceeded our expectations. While the UK economic environment is challenging, CSC is well positioned for growth with assets of uniquely high quality, a considerable capital base, a committed management team and a pipeline of future projects.”
bridget.oconnell@estatesgazette.com
