Chairman's Statement

Performance Overview 

I am pleased to report a strong performance in 2015 in Capital & Regional’s first year as a REIT and following the transformational corporate activity undertaken by management in 2014.

Operating Profit for 2015 has increased by 24% to £24.0 million. This outcome reflects the benefit of the cost synergies achieved following the integration of the Mall Fund, as well as the initial income uplift derived from the Company’s existing asset management programme. Profit for the period has increased from £75.2 million to £100.0 million, primarily reflecting unrealised valuation gains during the year.

NAV per share has increased by 20% to 72p, reflecting an increase in property valuations of 8% after adjusting for capital expenditure. The strengthening investment market was the principal driver of valuation gains in the first half of the year. However, as the year has progressed, the impact of growth in income and the resultant repositioning
 of the schemes have been the more important drivers of the rise in valuations.

This overall level of performance reinforces the Board’s confidence 
that retailers and leisure operators are responding very positively to the investment being made in our shopping centres, and that this growing programme provides a sound base from which to further grow income and dividend.


The prospects for growth in income and dividend, together with capital appreciation, underpin Capital & Regional’s strategy of focusing on a core portfolio of dominant community shopping centres. High footfall and attractively priced space not only ensure that the current tenant base trades profitably, but also attracts an increasing range of fashion retailers and leisure operators to our centres.

Execution of the highly accretive 
£65 million capital programme in The
 Mall is gathering momentum. Additional investment opportunities within the portfolio have been identified which will support further growth in the medium term, whilst Capital & Regional’s presence in town centres also gives it a position of influence as councils look to regenerate the town centres.

This repositioning is already leading to attractive opportunities to further consolidate our market leading position in the towns in which we are located.

Whilst organic growth is driving much of the expected increase in income, selective acquisitions provide opportunities to accelerate growth. This is well evidenced by the acquisition of Buttermarket, Ipswich in March 2015 as well as, shortly after the year end, The Marlowes, Hemel Hempstead. Not only do these acquisitions leverage our management platform and provide a showcase for the Group’s asset management skills, they also contribute to income and dividend growth.


Key Stats

The prospects for growth in income and dividend, together with capital appreciation, underpin Capital & Regional’s strategy of focusing on a core portfolio of dominant community shopping centres.


John Clare CBE

Secondary Listing

In October 2015 we commenced a secondary listing on the Main Board
 of the Johannesburg Stock Exchange (JSE) in South Africa, following strong interest we had received from South African institutional and private investors. The JSE listing has helped in starting to broaden the depth and spread of our shareholder base and provides good scope for further improving the liquidity of our shares as well as enhancing potential funding options for pursuing future growth and investment opportunities.


For 2015, the Board is proposing a final dividend of 1.62p per share, taking the full year dividend to 3.12p, representing an increase of 228% compared to last year. This is ahead of the guidance of 2.9p per share provided with last year’s full year results and that of at least 3.0p per share given with the interim results in August 2015 and the trading update issued on 13 January 2016.

Reflecting the growth prospects for the business, the Group is targeting growth in dividend in the range of between 5% and 8% per annum in the medium term.

Responsible Business

A ninth consecutive ROSPA Gold Award highlights the importance we attach to continually advancing health and occupational safety standards across our shopping centres.

Given the current security environment, there has been a significant increase
in the training of our operational teams to ensure that they, as well as our retailers and shoppers, are as well prepared as possible to respond to any potential threat. Expert advice is sought from the police locally, as well as our security advisers to ensure we are in a position to be able to respond quickly and appropriately to potential security incidents.

The Group actively seeks to take steps to reduce its environmental impact. Once again, we have received recognition for our achievements which include:

  • Green Star status in the Global Real Estate Benchmark Retention of the Carbon Trust standard for a seventh year; and
  • 2 position in the Real Estate Environmental Benchmark on a survey across 100 shopping centres in the UK.

 The Group takes pride in its role at the heart of the communities in which we are present. Each shopping centre team is encouraged to raise money on behalf of local charities and across the portfolio, we raised over £270,000 on behalf of local charities, an increase of 8% on last year.

The Board

In anticipation of Philip Newton stepping down as a Non-Executive Director at
the annual general meeting in 2016, we welcome Laura Whyte as a Non-Executive Director, having joined the Board on 1 December 2015. Laura brings a wealth of experience from a successful career with the John Lewis Partnership, where she served in two separate roles on the Managing Board for over 10 years, firstly as Registrar and latterly as HR Director.

Wessel Hamman joined the Board in June 2015, replacing Neno Haasbroek as Parkdev’s second Board representative. Wessel brings extensive experience and knowledge of the real estate market and of property finance.

I would like to thank both Philip and Neno for their significant contribution over nine and six years respectively, during which time Capital & Regional’s fortunes have been transformed.


Finally I would like to thank all staff for their contribution during 2015. Our
teams’ constant focus on operational excellence and adopting an entrepreneurial approach towards acquisitions and asset management opportunities is one of the Group’s key differentiators and remains critical to the creation of future value for our shareholders.