Reit good results for Capital & Regional

Going is good for the newly transformed real estate investment trust (Reit), although not quite as good as suggested by the statutory profit numbers: these were skewed by the buyout of the minority interests in its Mall portfolio in December, which made its first full contribution in the first half. Like-for-like operating profit at the Mall was up 28 per cent at £11.9m, but only because of a reduction in fees and expenses, with gross rental income marginally lower.

Lease renewals were pitched 6 per cent ahead of estimated rental values - the numbers surveyors use in their valuations - while rents for new tenants were signed 23 per cent above ERV. The latter have been driven by the arrival of high-quality tenants such as gyms, which are in some cases moving into previously unused space. Overall occupancy was up from 94.3 per cent to 96.4 per cent year on year.

Management believes good progress is being made against its £65m investment programme. The company has completed a mall refurbishment at Walthamstow, and has kicked off a similar upgrade at its Maidstone centre.

Numis Securities analyst Robert Duncan sees some scope for upgrades to his year-end net asset value forecast of 70p.