Annual Report and Accounts
for the year ended in 30 December 2023
Enhancing community centres with
expertise
& innovation
Introduction
Our Community Centres
Capital & Regional is a UK-focused retail property REIT specialising in community shopping centres that provide needs-based,non-discretionary and value-orientated retail goods and services.
Our centres are more than just shopping centres, they are platforms for social, cultural and commercial prosperity. Our centres are tailored to the unique needs and aspirations of the local communities and form a fundamental part of the community ecosystem.
Capital & Regional has a demonstrated track record of delivering value-enhancing retail and leisure asset management opportunities across its portfolio of tailored and centrally located community shopping centres.
Capital & Regional is listed on the main market of the London Stock Exchange and has a secondary listing on the Johannesburg Stock Exchange.
Our Behaviours and Principles
What we do is transformational.
We turn space into platforms for social, culture and commercial prosperity.
Platforms are the foundation from which people can stand, reach and grow
- and the building blocks of an ecosystem.
Social prosperity: from NHS services to local community cohesion, support and services. Our centres offer this.
Commercial prosperity: our work is fundamental to local, regional and national economies. We empower business growth, create jobs and enrich lives.
Cultural prosperity: from CRATE to Snozone to the Identity School of Acting, cultural experiences increase our community members' quality of life.
View our
Corporate Website
capreg.com
Find out more about our
Pathway to Net Zero Report
capreg.com/esg/ environmental-sustainability/pathway-to-net-zero
Stock code: CAL
Highlights
Revenue1 | Net rental income | ||
2023 | £59.0m | 2023 | £23.9m |
2022 | £56.8m | 2022 | £23.5m |
Adjusted Profit | Adjusted Earnings per share | ||
2023 | £12.7m | 2023 | 6.8p |
2022 | £10.3m | 2022 | 6.2p |
IFRS Profit for the period | Basic Earnings per share | ||
2023 | £3.7m | 2023 | 2.0p |
2022 | £12.1m | 2022 | 7.3p |
Total dividends per share | Net Asset Value (NAV) per share | ||
2023 | 5.70p | 2023 | 90p |
2022 | 5.25p | 2022 | 106p |
EPRA NTA per share | Group net debt | ||
2023 | 88p | 2023 | £162.7m |
2022 | 103p | 2022 | £130.9m |
Net debt to property value | |||
2023 | 43.6% | Read more about | |
Key performance indicators | |||
2022 | 40.6% | ||
on pages 30-33 | |||
1. 2022 comparative has been restated for a prior year adjustment to service charge income and expenditure recognised in the period. There has been no change to Profit.
Contents
Business Overview
06 Our Portfolio
10 Chairman's Statement
Strategic Report
- The Market Backdrop
- Our Business Model
- Our Strategy
- Key Performance Indicators
- Chief Executive's Statement
- Operating Review
- Financial Review
- Managing Risk
- Our Stakeholders
- ESG Report
- TCFD Disclosure
Governance
121 Board of Directors
- Senior Leadership Team
- Corporate Governance Report
- Nomination Committee Report
- Audit Committee Report
- Directors' Remuneration
- Directors' Remunerations Policy
- Directors' Remunerations Report
- Directors' Report
- Directors' Responsibilities Statement
- Independent Auditor's Report
Business Overview
Use of Alternative Performance Measures (APMs)
Throughout the results statement, we use a range of financial and non-financial measures to assess our performance. A number of the financial measures, including Net Rental Income, Adjusted Profit, Adjusted Earnings per share, Net Debt and the industry best practice EPRA (European Public Real Estate Association) performance measures are not defined under IFRS, so they are termed APMs. APMs are not considered superior to the relevant IFRS measures, rather management use them alongside IFRS measures to monitor the Group's financial performance because they help illustrate the trading performance and position of the Group. All APMs are defined in the Glossary and further detail on their use is provided within the Financial Review.
Financials
- Consolidated Income Statement
- Consolidated Statement of Comprehensive Income
- Consolidated Balance Sheet
- Consolidated Statement of Changes in Equity
- Consolidated Cash Flow Statement
- Notes to the Financial Statements
- Company Balance Sheet
- Statement of Changes in Equity
- Notes to the Company's Separate Financial Statements
- Glossary of Terms
- Five Year Review (Unaudited)
- Portfolio Information (unaudited)
- EPRA Performance Measures (unaudited)
-
Advisers and Corporate Information
230Shareholder Information
Capital & Regional PLC Annual Report and Accounts for the year ended 30 December 2023 | 01 |
Our Community Strategy
Drives Operational Performance
Our steadfast commitment to non-discretionary,value-oriented, local retail and
services is a driving force behind our operational performance, ensuring the
wellbeing of our communities.
Recovery and Growth in
Operational Performance
99.2%
Rent collection in line with historic pre-Covid levels (2022: 97.6% at time of Year End results)
86
New lettings and renewals achieved during the year at a combined average premium of 6.8% to previous rent (2022: 80)
+1.5%
Footfall amounting to 86.7% of pre-Covid levels, with 44.5 million shopper visits
93.4%
Occupancy steady with the marginal decline due to Wilko administration (December 2022: 94.1%)
£23.9m
Net rental Income showing an increase driven primarily by improved occupancy and rent collection (2022: £23.5m)
Continued progression with our Capex programme with investments expected to produce a yield on cost in line with our 8% to 9% target
£16.0m
Total net amount invested by the Group during 2023
£5.3m
Invested into ongoing works for the new 20,000 sq ft NHS facility due to open in Spring 2024 at Ilford
£0.6m
Invested to create the new The Bridge food court which successfully opened in June 2023
£4.8m
Invested in the new 35,000 sq ft TK Maxx anchor unit that opened in November 2023 at Ilford
Progressing with our
ESG commitments
100%
Scope 3 onsite data collected during the period
8%
Total reduced energy consumption compared to 2022
12,627
Trees planted between C&R and Snozone, offsetting 403 tons of CO2
141
Charities supported
Gyle
The £40m acquisition of Gyle Shopping Centre marks the first step towards rescaling our business and fully leveraging our proven skills and management expertise.
Read more about Key performance indicatorson pages 30-33
02 | Stock code: CAL |
Why we Exist
We exist to protect and progress the essentials of community life.
We are more than non-discretionary retail, we are spaces for communities to gather. We are the local shopping centre where toddlers have their first meal out, where teens embark on their first jobs, where the older generation come for support and interaction.
We are connection, love, belonging, play, education, participation, knowledge, support, culture, experiences, hope and understanding.
So what does this mean for who we think we are? We are a growth company. We invigorate culture, we fuel commerce and we impact society
• We incubate and inspire | • As a leader in our field, we | • We are there for families |
businesses to grow. | aspire to help our people | through generations: |
• Through our investments and | grow as individuals and | supporting growth through |
professionals. | every life stage. | |
support, we grow community | ||
spirit and drive social cohesion. |
In the world we currently live in, we have an increasingly important role. And to deliver on this role and thrive in a modern world we must operate consistently at our best and beyond. To be relevant, impactful, world- class and united.
We have four core principles and twelve behaviours that help us to do that and how we do things:
Bring The World In | • Get out there to experience different |
Because our world is made | perspectives. |
• Bring fresh ideas to the table. | |
richer from worlds beyond: | • Embrace people from all walks of life. |
Uplift The Everyday | • Go beyond the expected to surprise and delight. |
Because a little magic and a | • Understand and respond to what people want and need. |
• Celebrate each other's effort, big and small. | |
lot of energy go a long way: | |
Make It Count | • Prioritise for impact and waste no time making |
Because time, money and | it happen. |
• Push ourselves to uphold world-class standards. | |
resources are precious: | • Take ownership and responsibility for our actions. |
Win As One | • Give people the space to make new mistakes and grow. |
• Respect each other's strengths and learn from | |
Because together we | each other. |
• Speak the honest truth to earn trust and | |
grow strong: | |
grow stronger. | |
Business Overview
Capital & Regional PLC Annual Report and Accounts for the year ended 30 December 2023 | 03 |
Our Community Shopping Centre Approach
Our community shopping centre approach continues to demonstrate resilience despite the persistent challenges within the retail sector. Evolving from needs-based retail, our centres create value for each of our communities and provide vibrant, diverse, and tailored space.
Our focus has been for our centres to provide a strong retail offer consisting of services and non-discretionary retail in locations with strong transport links. This enables us to provide a convenient and seamless experience for our guests.
The communities we serve are at the heart of everything that we do, taking care to add value at a local level to provide a strong and successful customer proposition.
Our customer product and service offerings
We are strongly positioned to cater to our guests' fundamental and routine non-discretionary shopping requirements and services.
Change in merchandising mix since we launched our
Community Shopping Centre Strategy in 2017:
25.0%
18.3% 21.8%
9.5%
7.8%
30.7%
6.3%
10.0% 10.7%
2017 Customer Proposition
5.6%
6.4%
15.6%
16.8%
15.5%
2023 Customer Proposition
Value Apparel | Athleisure & Footwear | Food & Grocery | Health & Beauty | Services | Home & Gifts | Others | ||||||
Our difference
Our key distinction from competitors in the retail sector lies in our commitment to being more than merely a shopping destination; we are regarded as an integral part of our guests' daily routines.
01 | Dominant Community Locations | 03 | Strength of Community Links |
Our centres are an essential aspect of | The strength of our community | ||
the community; strategically located | connections empowers us to address | ||
with robust transportation links, they are | local needs swiftly and efficiently. | ||
ideally situated to cater to the needs | |||
of local residents. | |||
02 | Diversified Income Streams | 04 | Experienced Management |
We prioritise a mixed-use approach, | Our management teams possess | ||
aiming to optimise our presence across | extensive expertise in the retail sector, | ||
retail, hospitality and service sectors. | continually enhancing their skills | ||
through the training and development | |||
programs offered by C&R. |
04 | Stock code: CAL |
Business Overview
The continued evolution of our assets
Community and local focus
Our assets are situated in local town centres, serving as integral components of the community infrastructure at the core of these neighbourhoods. Our objective is to enhance each community by addressing their everyday
requirements and championing the causes that holdCentre Characteristics significance for them.
Remerchandising retail offer
In 2023, we prioritised adapting and expediting the remerchandising process towards a greater emphasis on non-discretionary retail and services.
Role of the store
Throughout 2023, we observed sustained recognition of the significance of physical stores, for both consumers and retailers alike. Despite the growth of online retail, the physical store remains a vital and dominant touchpoint for retailers to interact with our guests and foster loyalty.
And our centres remain dedicated to fulfilling the essential shopping needs and services of our guests.
1 | Dominant strategic locations |
in the centre of growing towns | |
2 | Easily accessible with |
strong transport links | |
3 | Densely populated local areas |
4 | Accretive asset management |
opportunities including leisure, |
residential, medical and office uses
Diversification of uses
Our varied retail offerings guarantees consistent foot traffic and repeated visits, resulting in high conversion rates.
Capital & Regional PLC Annual Report and Accounts for the year ended 30 December 2023 | 05 |
Our Portfolio
Spain |
Key |
1
Shopping centres
Snozone
8
7
5
6 34
2
- Gyle, Edinburgh
- Freehold partially open shopping centre on two floors
- 415,000 sq ft
- 71 lettable units
- Principal occupiers: Marks & Spencer, Morrisons, Next, Boots
- The Mall, Maidstone
- Freehold covered shopping centre on three floors
- 500,000 sq ft
- 102 lettable units
- Principal occupiers: B&M, Matalan, PureGym, Boots, Sports Direct, Iceland, Next
- 17&Central, Walthamstow
- Leasehold covered shopping centre on two floors
- 260,000 sq ft
- 63 lettable units
- Principal occupiers: Lidl, Asda, Boots, The Gym, TK Maxx, Sports Direct
- The Exchange, Ilford
- Predominantly freehold covered shopping centre on three floors
- 300,000 sq ft
- 83 lettable units
- Principal occupiers: Next, H&M, NHS, TK Maxx
- The Marlowes, Hemel Hempstead
- Freehold covered shopping centre and high street parade
- 340,000 sq ft
- 90 lettable units
- Principal occupiers: B&M, Sports Direct, PureGym, Tesco Express
- The Mall, Wood Green
- Freehold partially open shopping centre on two floors
- 540,000 sq ft
- 114 lettable units
- Principal occupiers: Primark, Lidl, H&M, Boots, TK Maxx, Travelodge, Cineworld
Snozone
- 100% subsidiary
- Largest indoor ski slope operator in the UK
- Operating in 7 Milton Keynes,
8 Yorkshire and 9 Madrid
- In existence since 2000 and has taught over four million people to ski or snowboard.
See pages 42-43 for more details.
06 | Stock code: CAL |
1 Gyle, Edinburgh
Shopping centre size
In September 2023 we completed the acquisition of Gyle for
£40 million, excluding acquisition costs. The shopping centre spans 415,000 sq ft and compromises of 88 retail units.
Gyle offers 2,800 free car parking spaces in a strategic location serving two affluent residential areas, alongside the bustling commercial districts of South Gyle and Edinburgh Park.
Tenant mix
Gyle is anchored by Marks & Spencer and Morrisons supermarket and is strategically located on a 50-acre site. This acquisition aligns with our long-standing community shopping centre strategy, introduced back in December 2017.
Strong transport links
Gyle stands as a thriving hub of community life. It also benefits from the convenience of a nearby tram system, connecting the airport to Edinburgh City centre, thus enhancing accessibility and driving footfall.
Centre statistics
415,000 | 88 |
Total sq ft | Retail units |
2.7 2,800
Miles from | Car park |
airport | spaces |
8.6m | 6 |
Footfall | Miles from |
city centre |
2 The Mall, Maidstone
Shopping centre size
This freehold covered shopping centre, spans three floors and encompasses 500,000 sq ft.
Tenant mix
The Mall, Maidstone includes brands such as B&M, Matalan, PureGym, Boots, Sports Direct and Iceland.
Sustainable initiatives
At The Mall, all our electricity comes from renewable energy sources - helping us to take an even more sustainable approach as we move to the future. In terms of service to people, The Mall participates in Purple Tuesday every year to support inclusivity and accessibility for guests with disabilities. On this day, we turn off centre music to create a calm shopping environment for those with sensory issues and decorate with purple.
Centre statistics
500,000 sq ft
Total sq ft
98
Retail units
245,647
Core catchment
Business Overview
3 17&Central, Walthamstow
Shopping centre size
17&Central is a leasehold covered shopping centre spanning two floors and encompassing 290,000 sq ft. Our recent launch of the new food and events hall in Walthamstow, spanning 16,000 sq ft on a mezzanine level, demonstrates our dedication to enhancing community engagement by providing grab-and-go food options, a bar and versatile event spaces.
Tenant mix
17&Central has 67 lettable units with occupiers including Lidl, Asda, Boots, The Gym, TK Maxx, and Sports Direct.
Residential development
17&Central also has ongoing construction work on a residential development project. Long Harbour are on site creating 495 Build to Rent residential apartments in two towers that are scheduled to complete
in 2025.
Building strong transport links
We are introducing a new Victoria Line tube station entrance and public spaces, aligning with our strategy
of creating holistic and community- centric destinations.
Centre statistics
290,000
Total sq ft
67
Retail units
495
Build to Rent apartments being developed
Capital & Regional PLC Annual Report and Accounts for the year ended 30 December 2023 | 07 |
Our Portfolio continued
4 The Exchange, Ilford
Shopping centre size
This predominantly freehold covered shopping centre spans three floors, with 310,000 sq ft and 81 lettable units. The Exchange includes principal occupiers such as the NHS, Next, H&M and TK Maxx.
Sustainable initiatives
Our commitment to sustainability is exemplified by the green initiatives within the Exchange. Through collaboration with Don't Waste, we have made commendable strides in improving recycling accuracy on-site. The Exchange was also recognised as the best large business by Ilford Business Improvement District (BID) and the council, further emphasising the centres integral role within the local community.
Investment in community healthcare facilities
In line with our continuous commitment to serve our communities, we have invested in a new 20,000 sq ft NHS facility due to open in late Spring 2024.
Centre statistics
310,000
Total sq ft
£4.8m
Investment in
NHS facilities
81
Retail units
The Marlowes,
5 Hemel Hempstead
Shopping centre size
A freehold covered shopping centre with a high street parade, The Marlowes occupies 320,000 sq ft and accommodates 89 lettable units.
Tenant mix
Key anchor tenants include B&M, Sports Direct, PureGym and Tesco Express. Hemel Hempstead is a strong South East commuter town located just outside of the M25. The opportunity exists to reposition this asset and potentially consolidate it with other retail properties adjoining the scheme, as part of a regeneration of the wider town centre.
Centre statistics
320,000
Total sq ft
151,837
Core catchment
89
Retail units
6 The Mall, Wood Green
Shopping centre size
A freehold partially open shopping centre spanning two floors and with 630,000 sq ft of retail space.
Tenant mix
It houses a diverse range of 106 lettable units, including prominent occupiers such as Primark, Lidl, H&M, Boots, TK Maxx, Travelodge, and Cineworld.
Food catering offering
The Bridge, opened in June 2023, is a thriving and vibrant food court, underscoring our dedication to enhancing community engagement and delivering an exceptional shopping and dining experience.
Centre statistics
630,000
Total sq ft
£12m
Investment by the
NHS
106
Retail units
08 | Stock code: CAL |
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Capital & Regional plc published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 16:00:07 UTC.