Capital Shopping Centres has posted weaker than expected half-year results, with rental income falling 2.3%.
The shopping centre owner said that while occupancy across its portfolio remained firm at 95% for the first two quarters, like-for-like net rental income slipped as rent increases were offset by the effect of tenant failures.
Analysts at JP Morgan said this was “slightly weaker than expected” and contrasted the group with Hammerson, which delivered a 3.3% increase in rental income over the same period.
However, CSC reported “encouraging” footfall, which has been steady since the end of the first quarter, only down 1% in the year-to-date, outperforming the national benchmark, which has fallen 3%.
It said that its property values remained “resilient” and were unchanged in the first half compared with the IPD retail index, which has fallen 2.9% over the same period.
JP Morgan estimates that without the Trafford Centre, which was valued at £1.732bn, up 1.9%, with occupancy up 0.8%, the overall portfolio valuation change would have been -0.5%.
CSC’s average portfolio estimated rental value was down 0.3% and the initial yield stood at 5.08% at the half-year, compared with 5.14% at the end of December.
The group recorded a profit for the period of £78m, compared with £192m the same time last year, when property values rose by £58m and it made a gain on swaps movement.
Its net asset value was 390p a share and underlying earnings per share were up 1% to 8.1p.
Chief executive David Fischel said: “Our prime UK regional shopping centres have continued to show considerable resilience, with robust operating metrics supporting sound financial results.
“We have made good progress on our two strategic priorities for 2012, ensuring that our centres produce a strong performance relative to current economic conditions while positioning each asset for longer term organic growth from an increasing pipeline of active management projects and extensions.”
bridget.o’connell@estatesgazette.com
