Capital & Regional shares surge on rising dividend and earnings
Capital & Regional, the retail fund listed in the UK and SA, grew its interim dividend 6.8% in the six months to June, thanks to a strong performance from its shopping centres.
The market reacted favourably to the results, with the company’s share price rising more than 5% on Thursday, after it declared an interim dividend of 1.73p. The owner of malls in secondary UK cities could become a takeover target if it continues to reward investors and hold on to its assets.
Capital & Regional wholly owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. It also has a 20% interest in the Kingfisher centre in Redditch.
The group manages these assets, which comprise more than 900 retail units and attract about 1.7-million shopping visits each week, through its in-house property and asset management platform. CEO Lawrence Hutchings said the results were helped by the well-positioned centres focused on convenience.
With a market capitalisation of R6.73bn, Capital & Regional could be a takeover target for other listed property funds. South African real estate investment trusts that have not managed to gain a foothold in western European property could see Capital & Regional as a potential launch pad into that region. The likes of Growthpoint Properties and Investec Property Fund have spoken publicly in recent months about scouring the UK for acquisition or partnership opportunities.
Growthpoint was continuing to hunt for opportunities across Europe, CEO Norbert Sasse said on Thursday. Investec Property Fund CEO Nick Riley has said that, while the group had not found many suitably priced acquisition opportunities in SA, the group’s teams in the UK and Ireland were considering potential deals.
Capital & Regional is streamlining its cost structure, which has led the company to target annualised savings of at least £1.8m by 2018.
Evan Robins, listed property manager of Old Mutual Investment Group’s MacroSolutions boutique, said Capital & Regional’s results were among the better sets of results released during the latest results season.