Capital & Regional is turning to alternative and residential uses to offset retail losses.
The UK REIT saw £121m wiped off the value of its shopping centre portfolio last year, with declines focused outside of London in less-connected locations.
Full-year results for the period ended 30 December 2019 put the value at £727m, down from £855m.
Its EPRA NAV per share dropped 38.4% to 364p, with rental income down 5% to £49.3m.
Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. It reported a 46% LTV at the end of 2019, compared to 48% the previous year, largely driven by a £77.9m investment from Growthpoint, which completed in December.
Chief executive Lawrence Hutchings said: “Mindful of the ongoing pressures that retail property valuations have placed on leverage, we continue to actively realise value from alternative use and residential opportunities.
“Of course, these types of opportunities will also benefit the centres in the future by increasing catchment and footfall.”
He highlighted a £5m payment for the completion of the sale of non-core land at Wood Green to Aitch Group, in line with book value; and a partnership in Walthamstow to deliver 450 homes, with a sale expected this year.
The Mall in Walthamstow was closed last year following a fire, 85% of the units have since reopened, with plans to rebuild the remaining units.
The REIT is pursuing a strategy to reposition its shopping centres as “community centres”, while also restructuring the company to enable decentralised teams and improved data capture, insights and decision-making.
Hutchings added: “We are actively involved in unlocking the latent value of our real estate in the middle of town centres, with access to transport connections and complementary uses and, in the case of the London portfolio are able to increase the density of our sites through the addition of residential, hotel, offices and other uses that enhance our communities and generate value for our stakeholders.”
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