Capital Shopping Centres, the owner of Manchester's Trafford Centre as well as Lakeside in Thurrock, and the MetroCentre in Gateshead, has fallen back despite an upbeat trading statement.
The group, which last year rebuffed a takeover proposal last year from US group Simon Property, said the number of visitors to its centres rose by 2% between July and October, while it had a 97% occupancy rate. But with retailers being particularly hard hit by the consumer slowdown brought about partly by the coalition's austerity drive, it warned the outlook continued to be difficult. It said:
We continue to expect a low growth environment, a challenging retail market and a restricted financing market for real estate for some time in the UK, with the Eurozone crisis creating more uncertainty and impacting investment decisions.
The caution helped push the company's shares 6.7p lower to 333.3p, a near 2% decline. Evolution Securities issued a sell note, with analyst Alan Carter saying:
No surprises at all with robust occupancy levels and decent conversion of short term to long term lets, tempered by realistic comments on the "challenging" retail environment and a "low growth environment".
The net asset value is likely to make only very modest progress this year to around 400p and the dividend looks ex-growth for a while yet. Given that these are the two key metrics for a real estate investment trust, this feels like dead money. The 15% discount to net asset value is demanding against say Hammerson on 23% discount; we can only assume this reflects vague bid hopes after Simon's fly by 11 months ago, and its recent bond issue.
Simon however appeared to rule out another move on Capital Shopping Centres when it reported results last week.
