25 APRIL 2012 CAPITAL SHOPPING CENTRES GROUP PLC INTERIM MANAGEMENT STATEMENT FOR THE PERIOD FROM 1 JANUARY TO 25 APRIL 2012 David Fischel, Chief Executive f Capital Shpping Centres Grup PLC, cmmented: CSC is determined t prvide the best experience t shppers and t cntinue t attract leading retailers t ur prime reginal centres, with 27 new stres pening in the perid. While the UK retail envirnment remains tugh, we cntinue t benefit frm last year s transfrmatinal Traffrd Centre acquisitin as we fcus n securing the right retailers in the right places paying the right rents with the bjective f achieving strng ttal returns frm ur assets. Highlights f the perid Tenant mix imprvements: Exciting new brands brught t CSC centres including Nespress at Traffrd Centre and Lcker Rm at Lakeside 42 new lng term leases signed, in aggregate 10 millin f annual rent, arund 10 per cent abve previus passing rent and in line with ERV Active management initiatives driving change, particularly enhancing catering and leisure fferings Prgress with majr prjects: Operatinal indicatrs: Capital recycling: Lakeside - plans unveiled fr a new leisure destinatin, in cnjunctin with prpsed 325,000 sq. ft retail extensin Nttingham - OFT clearance, active discussins with retailers and lcal authrity Braehead mall refreshment plans, preparatin f masterplan cntinuing Acquisitin f adjacent prperty at Cribbs Causeway with ptential fr future develpment Ftfall dwn 2 per cent year t date utperfrming the natinal average Tenants representing 3 per cent f rent entered administratin, f which 2 per cent was reprted at the time f the 2011 full year results in February; ccupancy 94.3 per cent, 95.0 per cent including tenants in administratin still trading 49 millin realised in March frm part dispsal f Equity One sharehlding
Tenant mix imprvements We have maintained prgress during the perid in respect f ur lng-standing bjective f ensuring the right blend f retail, leisure and catering in all ur centres. 27 new stres have pened in ur centres since Christmas including Nespress at Traffrd Centre, the UK s third Lcker Rm at Lakeside, Thmas Sab at Braehead, Bux Avenue at Chapelfield and Dwell at St David s, Cardiff. 42 new lng term leases have been agreed, in aggregate 10 millin f annual rent, apprximately 10% abve previus passing rent and in line with ERV fr thse units. These include: Frever 21 t cme t The Traffrd Centre fllwing the pening this autumn f their flagship stre at Lakeside A majr glbal brand already trading in several CSC centres t duble its space at Manchester Arndale and t pen in Harlequin, Watfrd, and The Glades, Brmley Superdry t extend int an adjacent unit at The Traffrd Centre and t pen in the frmer HMV stre in Manchester Arndale Café Ruge t jin Carlucci s, Y!Sushi and Ask in the rapidly develping restaurant quarter at Chapelfield, Nrwich With a fcus n creating a dynamic envirnment fr shppers and retailers, in particular t meet demand fr mre catering and leisure attractins, active management initiatives are underway at mst centres, fr example we have: agreed terms with an peratr, subject t planning permissin, fr a majr new leisure attractin at Bartn Square, Traffrd Centre agreed terms fr the final letting at MetrOasis, a fur restaurant develpment at Metrcentre currently under cnstructin and n schedule t pen in the autumn secured planning cnsent fr a 58,000 sq. ft. leisure and catering develpment at The Ptteries, Stke-n-Trent and are in advanced negtiatins with cinema and restaurant peratrs resubmitted an applicatin fr a fully pre-let terrace f five restaurants at Queen s Gardens, Brmley Operatinal indicatrs A number f factrs cntributed t a 2 per cent year n year reductin in ftfall at CSC s centres fr the year t date. By cmparisn, UK natinal retail ftfall as measured by Experian fell by 3 per cent year n year in the same perid. The three and a half mnth perid is t shrt t enable a cnclusin t be made n the likely full year trend and we will reprt n this measure again in July. Occupancy acrss CSC s centres stands at 94.3 per cent, dwn 2.4 per cent frm 31 December 2011 due t pst Christmas tenant administratins (see belw) and expiry f seasnal lettings. As we cmmented at ur 2011 full year results, ur fcus is n securing the right retailers in the right places paying the right rents with a view t capital appreciatin ver the medium
term. We believe that this rbust apprach is apprpriate fr CSC even if it impacts vacancy levels, rental incme and vid csts in the shrt term. CSC is benefitting frm shppers and retailers increasing cncentratin n the strngest destinatins as ur interests include ten f the UK s tp 25 shpping centres. Retailer demand fr larger spaces fr flagship stres in the highest ftfall lcatins remains strng, given the very limited shpping centre cnstructin pipeline in the UK. Tenant administratins tend t be cncentrated in the pst Christmas quarter. Sme 3 per cent f CSC s rent rll, 75 units, entered administratin in the first quarter f 2012. This includes the 2 per cent which was reprted at the time f the 2011 full year results in February. Of the 75 units, 25 (1 per cent f rent) have been relet r are under ffer. The remaining 50 units plus failures frm prir perids leave CSC with 78 units (3 per cent f rent) currently let t tenants in administratin and treated as vacant in the 94.3 per cent ccupancy rate. Adjusting fr the 18 f these units which are trading in administratin, ccupancy is 95.0 per cent. As lng as the UK ecnmy remains flat, we expect the letting envirnment t cntinue t be challenging. Hwever, due t rbust evidence, we have seen psitive rent review settlements in the perid, ntably at Manchester Arndale s nrthern extensin and fr Lakeside s department stres. Prgress with majr prjects We cntinue t make gd prgress with majr plans fr rganic grwth: We are fully engaged in the planning prcess t btain permissin fr ur prpsed 325,000 sq. ft. expansin f Lakeside s retail ffer. In March, we als unveiled plans fr an exciting new leisure destinatin at Lakeside cmprising new cafes, restaurants, bars and leisure uses including family entertainment venues and health and fitness facilities Our acquisitin f Bradmarsh, Nttingham, received clearance frm the Office f Fair Trading in March, paving the way fr discussins t start with retailers regarding their appetite fr upgraded space in the city. We aim t bring frward prpsals fr cmplementary develpment f Bradmarsh and ur existing prime centre in Nttingham, Victria Centre At Braehead, wrk has cmmenced n a full scale mck-up f the planned visual imprvements t the upper level. We cntinue t wrk with the lcal authrity n a master plan f a range f uses fr the brader Braehead area At Cribbs Causeway, CSC and partner PruPIM have jintly acquired fr 24 millin the sectin f the neighburing Centaurus Retail Park clsest t The Mall at Cribbs Causeway which we regard as having cnsiderable strategic ptential. The initial yield n purchase price is 5.9 per cent with an average unexpired lease term f 9.6 years
Capital recycling and financing In March 2012 we dispsed f arund 4 millin shares, just ver a quarter f ur interest, in Equity One, a US REIT. The shares were btained by CSC in early 2011 in exchange fr ur directly held US prperty interests. The prceeds f 49 millin will be reinvested in the grup s rganic grwth prjects in the UK. N tax was payable n the dispsal. At the current share price and exchange rate, ur remaining interest in Equity One is valued at arund 140 millin. At 31 March 2012 net external debt has reduced marginally t 3.3 billin and the debt t assets rati (based n 31 December valuatins) was 48 per cent, within CSC s stated target range f 40 t 50 per cent. Prperty valuatins Investr demand appears t be keeping prime yields stable fr the highest quality retail assets althugh demand has weakened fr nn-prime prperties. As a result, the IPD mnthly index relating t all retail fell 1.1 per cent fr the first quarter. The next independent valuatin f CSC s assets will be undertaken n 30 June 2012 and published with the first half results n 26 July 2012. Cnference call A cnference call fr analysts and investrs will be held tday at 9.00 BST. A cpy f this press release is available fr dwnlad frm ur website at www.capitalshpping-centres.c.uk ENQUIRIES: Capital Shpping Centres Grup PLC David Fischel Chief Executive +44 (0)20 7960 1207 Matthew Rberts Finance Directr +44 (0)20 7960 1353 Kate Bwyer Head f Investr Relatins +44 (0)20 7960 1250 Public relatins UK Michael Sandler, Hudsn Sandler +44 (0)20 7796 4133 Wendy Baker, Hudsn Sandler +44 (0)20 7710 8917 SA Nichlas Williams, Cllege Hill +27 (0)11 447 3030
NOTES TO EDITORS: Capital Shpping Centres is the leading specialist UK reginal shpping centre REIT. Capital Shpping Centres Grup PLC (CSC) We wn and perate sme f the very best shpping centres, in the strngest lcatins right acrss the cuntry, attracting ver 320 millin custmer visits a year. Tw thirds f the UK ppulatin live within a 45 minute drive time f a CSC centre. With ver 16 millin sq ft f retail space, valued at 7 billin, every single ne f the UK s tp 20 retailers are in ur shpping centres, alngside sme f the wrld s mst icnic glbal brands. Our five majr ut-f-twn centres and nine in-twn destinatins include ten f the UK s tp 25 shpping centres. Our ut-f-twn centres include The Traffrd Centre, Lakeside, Metrcentre, Braehead, and The Mall at Cribbs Causeway, and ur in-twn prime destinatins include Cardiff, Manchester, Newcastle, Nrwich, Nttingham, Brmley, Uxbridge, Watfrd and Stke-n-Trent. In Nvember 2011, we acquired Bradmarsh shpping centre in Nttingham bringing ur prtfli t 15 centres. We are fully cmmitted t supprting ur lcal cmmunities and the wider envirnment thrugh meaningful and hands-n initiatives. Fr further infrmatin see www.capital-shpping-centres.c.uk