Capital & Regional reports 'strong' leasing momentum, welcomes Debenhams clarity
Shopping centre owner Capital & Regional reported "strong" leasing momentum on Friday as it welcomed further clarity around Debenhams.
In an update following its annual general meeting a day earlier, the company said it completed 20 leasing transactions in the first four months of the year, comprising eight new lettings and 12 renewals for a combined annual income of £1.2m.
Notable transactions completed in the last month include the letting of the final two floors of the Arndale House office to the council and terms agreed with Tesco for a 10-year lease renewal, both in Luton.
Capital & Regional said it has a strong leasing pipeline, with 30 transactions currently agreed or in solicitors' hands for new lettings or renewals representing more than £2m of annual income. Meanwhile, occupancy has remained "robust" at 96.7% as at 30 April 2019.
The company said footfall across its portfolio "significantly" outperformed the national index, with its three London centres increasing by 1.8%.
Chief executive Lawrence Hutchings said: "We continue to see solid progress in executing our strategy to reposition our community centres to focus on needs based and less discretionary goods, especially in our London and South East assets.
"We firmly believe that our repositioning and remerchandising plans, low average rents and high footfall metrics, differentiates our centres and ensures they remain relevant, profitable and attractive to retailers as the structural changes in physical retailing continue to evolve."
Capital & Regional welcomed clarity around Debenhams, which it said means it can now plan its capex and remerchandising "proactively". It said that while none of the three Debenhams stores in its portfolio were among the 22 due to close next year, the company voluntary arrangement that was approved in May will dent its 2019 net rental income by around £0.7m, or £1.3m on an annualised basis.
At 0950 BST, the shares were up 6.9% at 20.16p.