CAPE TOWN – UK recional shopping centre landlord Capital & Regional made a pre-tax loss of £55.4 million (R1 billion) in the six months to June 30, compared with a £6.7m profit a year earlier, due mainly to a fall in property valuations in a troubled UK retail property market.
Revenue for the group with a secondary listing on the JSE fell to £45.2m from £45.5m as a growing number of retailers entered administration stifled growth. A decision on the level of the interim dividend was also deferred following South Africa-based Growthpoint’s Properties’ announcement that it was in discussions to acquire a majority stake in Capital & Regional, through a subscription for new Capital & Regional shares and an injection of capital.
Adjusted profit fell 4.5 percent to £14.8m. The decline in valuations was driven by negative sentiment towards retail assets and impact of large-store groups in financial difficulties and their restructurings.
Chief execuitve Lawrence Hutchings said they were “well placed to evolve with the ongoing structural changes in the retail sector, as evidenced by our high occupancy, resilient income metrics and strong leasing performance”. Progress had been made to strengthen the balance sheet and provide additional liquidity, given a fall in valuations, which had lifted loan-to-value to 52 percent, from 48 percent at December 2018.
The sale of non-core land at Wood Green was expected to realise £5m.