CSC says trading in line as Trafford Centre outperforms
As the market digests the Ernst & Young Item Club’s gloomy predictions this week for UK retailers, Capital Shopping Centres today said it expected the rest of 2011 to remain tough. However, the listed shopping mall specialist said trading had been in line with expectations so far this year and footfall at its centres was up 3% year-to-date. Overall occupancy across all CSC’s centres was 96.8%.
“Some 1% of CSC’s rent roll, 41 units, has entered administration since the year end, a level CSC would regard as normal for the post-Christmas period. 13 of these units are still trading or have been re-let and a further 13 are under offer,” the group says.
CSC says consumers are choosing to visit larger retail centres, which have a wider range of shops, as well as leisure and catering attractions. The Trafford Centre in Manchester, which CSC acquired in January, has performed strongly with footfall up 7% so far this year. It was at 97% occupancy at the end of April and the company says it had received encouraging levels of interest for the eight vacant units at the mall.
Including the Trafford Centre, CSC now has more than 2,400 retail, catering and leisure units and pro forma passing rent of around £370m. The group has transacted 36 new long-term lettings so far this year for new annual rent of £6m. These lettings were at an aggregate secured rent 11% below ERV and include leases both above and below ERV. Those secured below ERV include “short-term lettings converting to long-term leases and a few persistent vacancies,” it noted. At the end of March, CSC had 173 short-term leases in place, representing 2% of passing rent and 5% of ERV.
