Capreg’s share price shoots up by 15.3 percent

THE SHARE price of Capital & Regional (Capreg), the owner of community-focused shopping centres in the UK, shot up 15.3 percent to R9.25 yesterday after it said that 98 percent of its stores were trading and last month’s footfall was outperforming the national index by 11 percent. The share closed at R10.24 on the JSE.

UK shopping centre landlords have faced difficult times due to lockdown restrictions that have since eased and the current resurgence of the virus in that country. Capreg, listed in London and on the JSE, is also 51.2 percent owned by diversified South Africa property group Growthpoint.

A portfolio manager, who preferred to remain anonymous, said Capreg offered a different and “interesting” proposition to investors compared with some of the other listed landlords in the UK, as its centres were less expensive and its tenants paid lower rentals. Its shares were not that liquid on the JSE, which tended to accentuate price movements,” he said.

Capreg, which deals with 614 store tenants, said in a trading update yesterday that it expected to imminently have received 52 percent of the quarterly rent due for the quarter to September 29, which compared favourably with less than 40 percent at the some time the previous quarter.

“This means we have collected approximately 56 percent of all rents that have fallen due from March 25, to the date of this announcement, including rents payable on both a quarterly and monthly basis,” chief executive Lawrence Hutchings said in a trading update.

“The in-town location of our centres, together with our focused strategy of serving the essential needs of our local communities, means they are benefiting from the increased number of people working from home and are performing well on a relative basis,” he said.

“Feedback from our retailers also indicated that average transaction values are registering higher than the comparable period last year, with shopper visits being purpose driven,” it said.

Rent collection was now in excess of 50 percent for the September quarter, ahead of both the previous two Covid quarters at the equivalent stage. Key initiatives progressed included the Lidl deal at Luton going unconditional, further increasing exposure to the grocery market, and the lodging of a joint planning application with our preferred residential partner for the Walthamstow project. September footfall was 76.1 percent of the prior year equivalent while car park usage was about 78 percent of the prior year equivalent.

Discussions were under way with retailer customers concerning the outstanding arrears and the company continued to provide support, particularly with its smaller, independent occupiers. A “robust stance” was being taken with larger, profitable and well capitalised national and international retail businesses.

Terms had been agreed with Travelodge at Wood Green after it went under administration, and with M&S at Luton, which would provide vacant possession and funds required to convert the space, in order to complete the transaction with Lidl.

“This will enhance the non-discretionary offer of this centre and, with further space under active negotiation with supermarket operators across the portfolio, is in line with the group’s community centre strategy,” said Hutchings.

At Walthamstow, in collaboration with a residential partner, revised planning applications have been submitted for a conversion to rent residential accommodation. The new proposals involved 538 residential units and (4 366m²) of commercial space.

Cash of more than £81 million (R1.7 billion), equivalent to more than one year’s revenue, was on hand at the end of September.