Capital & Regional buys Hemel Hempstead shopping centre

Capital & Regional announced the acquisition of the Marlowes Shopping Centre in Hemel Hempstead along with the release of its second half trading update.

The UK-focused specialist property REIT has exchanged contracts with Standard Life Investment for the acquisition of the shopping centre for £35.5m.

The group pointed out that Hemel Hempstead, which is located just outside the M25, has recently benefitted from significant investment from the local authority.

“The opportunity exists to reposition this asset and potentially consolidate it with other retail properties adjoining the scheme, as part of a regeneration of the wider town centre.”

The deal – expected to complete early next month – will be part funded by new debt of £17.8m with the Royal Bank of Scotland, secured on the asset, with the rest financed through available cash resources.

The company also update the market on its second half performance, which saw like-for-like contract rent across the shopping centre portfolio as at 31 December up 2.8% from the same period in 2014 to £68.7m.

Capital & Regional said it secured 72 new lettings in the period and 52 renewals, with the occupancy rate at the end of December up from 96.1% to at 97.2%.

Chief executive Hugh Scott-Barrett said: "The accelerating momentum in terms of letting activity and capex spend seen in the second half of 2015 confirms that we are on track to deliver the attractive returns promised as part of Capital & Regional's asset management plans.”

At 1045 GMT, shares were up 2.8% to 65p.