CAPITAL & REGIONAL TAKES CONTROL OF THE MALL THROUGH TRANSFORMATIONAL ACQUISITION AND BENEFITS FROM STRONG CAPITAL GROWTH

Capital & Regional plc
Half Year Results to 30 June 2014

Highlights

Progress in execution of strategy

• Acquisition of a controlling stake in The Mall in July 2014 at a discount of 5.4% to June 2014 valuation
• Associated £165 million capital raise enhances liquidity for shareholders
• Completion of £375 million five year refinancing of The Mall debt at initial cost of 3.37%
• Successful disposal by German Joint Venture of Lübeck Retail Park for €47.9 million

Financial

• Proforma¹ NAV and Proforma¹ EPRA NAV per share of 53p, an 8.1% increase on Proforma December 2013 Basic NAV equivalent
• Proforma¹ see-through net debt to property value of 55% following Mall acquisition
• Profit after tax £11.7 million (June 2013: £3.7 million)
• Increased interim dividend of 0.35p per share to enlarged shareholder base (June 2013: 0.25p)

Operational

• Attractive and affordable space in UK Shopping Centres driving 50 new lettings and renewals totalling £2.8 million at rents 1.5% above ERV
• Year on year occupancy increased by 1.0% to 94.5%
• Footfall up 1.7% year on year, outperforming industry benchmark by 1.5%
• Lincoln re-configuration completed with units handed over to Next and H&M
• Robust operational performance in Germany
• New Click & Collect agreement with CollectPlus

Future priorities

• Acquire remaining minority holdings in The Mall and restructure the fund
• Further sales of non-core assets in UK and Germany to reduce leverage and meet medium term LTV target of 40% to 50%
• Delivery of previously announced development and asset management initiatives
• Anticipated REIT conversion in December 2014

John Clare, Chairman:

"The successful acquisition of a controlling stake in The Mall is transformational for Capital & Regional. The acceleration of our exciting development and asset management initiatives is underpinned by a strong investment market and improving retail and consumer environment which, combined, ensure we are well placed to deliver attractive and growing returns to shareholders."

Hugh Scott-Barrett, Chief Executive:

"We are entering a very exciting period for Capital & Regional, in which the Group will benefit from its enlarged stake in the Mall and significant asset management initiatives at a time when retailer interest in both upsizing and taking new space in well located town centre schemes is increasing. The initiatives generate very attractive returns and are central to the investment case presented to shareholders at the time of the capital raise. The continuing strength of investment markets is also expected to provide support for a further uplift in valuations during the rest of this year."