News

Yours For £700M — 2 Shopping Centre Companies With £3.4B Of Assets

Courtesy of Capital & Regional
An Extension To Capital & Regional's Mall In Hemel Hempstead

Much-anticipated merger and acquisition activity came to the beleaguered UK shopping centre sector this week, with one potential take-over announced and another in the works. The deals could see two companies with net assets of £3.4B trade hands for less than £800M.

Capital & Regional said it had received an offer to buy a majority share in the company from Growthpoint Properties, South Africa’s largest REIT. The company did not specify what size stake Growthpoint might buy or what it would pay.

Cap & Reg’s shares rose 11% following the announcement, but that should be taken with a pinch of salt — the shares rose from 16p to 18p. The company has a market capitalisation of £131M and a portfolio valued at £797M. Its shares trade at a 65% discount to its net asset value of £384M.

The company said in half-year results for the period to 30 June that its net rental income had dropped 3% to £25M as a result of retailers going out of business and asking for rent reductions through company voluntary arrangements.

A deal would be Growthpoint’s debut acquisition in the UK. It has £7.3B of assets across all sectors in South Africa, including the V&A Waterfront development in Cape Town, once owned by the Livingstone Brothers.

In another piece of potential shopping centre M&A, the Sunday Times reported that Orion Capital is looking for partners for a potential take-over of Intu, the shopping centre REIT in which it owns a 9% stake. Intu’s shares jumped by almost 25% to 43p on the news. At that level the company has a market cap of about £600M.

The company’s shares trade at an 85% discount to its net asset value of £3B. Investors are worried about the company breaching debt covenants.

The FT speculated that Orion might team up with Peel Holdings, which owns 27% of Intu, to bid for the company.

The M&A news comes as a new report from PwC and the Local Data Company laid bare the carnage in UK retail property. A net 1,234 chain stores closed in the first half of 2019, an increase of 10% on 2018, and a huge leap from the 222 which closed in the first half of 2017.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's London Newsletters
Related Stories

Furniture Outlet The Dump Is Getting Dumped In Atlanta

Simon Approaching End Of The Road With Struggling Suburban Boston Mall

Chipotle Adding Hundreds Of New Locations Worldwide

Stockdale Capital Partners, Hamilton Lane Acquire Chino Hills Shopping Center For $157M

Bucks County Mall Closing As Owners Prepare Redevelopment Plans

Battersea Power Station Reveals Plans To Double Development Again

New Occupiers And More VC Money Fuel UK Life Sciences Rebirth

Canadian Firm Raises £680M For 6,000-Home UK BTR Push

Orega Completes PE-Backed Management Buyout: The London Deal Sheet

Starbucks Spending $1B To Turn Cafés Into Community Lounges

From Sector-Specific To Asset-Focused: Investment Strategies That Perform Today

The Difference Between Service And Hospitality That Makes A Flexible Workspace A Success