Blackburn The Mall
The Mall Blackburn has overcome the loss of Debenhams, its owner said. Credit: via FTI Consulting

CapReg narrows losses, looks to resi

Neil Tague

Shopping centre operator Capital & Regional has reported a pre-tax loss of £37.9m in its interim results, in from £115.5m year-on-year, and announced a tie-up with developer Far East Consortium.

The six months to the end of June 2021 saw revenues fall slight to £34.1m for the group, which includes The Mall Blackburn among its holdings.

However, it said that rent collection, a huge problem for retail landlords through the pandemic, has picked up – 83% of rent due for 2021 has now been banked.

Occupancy levels stand at 90%, slightly down from 92% at the end of 2020. Across the company’s seven community shopping centres, 54 deals were completed in H1 2021, compared to 24 in 2020 and 44 in 2019.

The drawn-out demise of Debenhams has created a problem for the group, but part of the Blackburn store has now been taken by Jobcentre Plus.

Chief executive Lawrence Hutchings said: “The momentum we are seeing across our business since the lifting of the third national lockdown in April has been very encouraging, reinforcing our belief in our Community Centres strategy and the quality of our real estate and platform.

“Footfall at our community centres has once again significantly outperformed the wider market with a noticeable trend of consumers spending more and visiting slightly less.

“We have continued to see strong levels of leasing throughout the entire first half, supported by our increased focus on new, start-up and independent retailers.”

The link-up with FEC is indicative of the keenness among retail landlords to diversify.

FEC has become a familiar name in the North West through its partnership with Manchester City Council to deliver the £4bn Victoria North housing masterplan.

The agreement will see the two groups work together over the next 18 months to identify and bring forward the development of new residential opportunities across the group’s shopping centre portfolio.

CapReg said that “while the primary aim of the partnership is to facilitate projects that will enhance asset value and/or generate potential land receipts for Capital & Regional, it will also assess where community retail and services might be added to FEC’s existing portfolio and pipeline, as well as seek new projects where the collective expertise and resources of the partnership could be utilised”.

The retail group has already disposed of an adjoining plot at Wood Green for residential development and secured a 500-apartment led planning consent at Walthamstow.

Hutchings said:  “Both FEC’s and our own management team recognise the importance of sustainable mixed-use urban environments that enhance the sense of place and serve their local communities.

“The combination of our existing skills and resources will help to unlock further opportunities to create these across, and potentially beyond, our existing estate.”

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