Capital & Regional acquires Edinburgh scheme for £40m

Capital & Regional has entered into an agreement to acquire The Gyle Shopping Centre in Edinburgh for £40m.

The real estate investment trust (REIT) said the acquisition will be financed through its existing funds, a new debt facility of £16m, and around £25m in proceeds from a open offering of shares.

Spanning 415,000 sq ft, The Gyle comprises 88 retail units and is anchored by Morrisons supermarket and a Marks & Spencer store.

The scheme has 2,800 free car parking spaces and is well connected via the tram system with good links to Edinburgh Airport.

Capital & Regional said The Gyle’s retail space is let at approximately £6.8 million of annual gross rent and around £5.77 million of net rental income, with strong rent collection and a headline occupancy of 94%.

Lawrence Hutchings, chief executive of Capital & Regional, said: “The Gyle Shopping Centre presents us with a number of asset management opportunities including refining the tenant mix, a renewed focus on leasing to improve occupancy and income, whilst enhancing the centre’s appeal to the growing and affluent catchment in south western Edinburgh.” 

This announcement comes as the REIT, which specialises in convenience and community-focused shopping centres, publishes its results for the first half of the year.

In the six months to 30 June 2023, Capital & Regional saw its revenue increase year-on-year to £30.7m, up from £28.5m in 2022. Adjusted profit also increased, from £5.9m in the first half of 2022 compared to £7m.

The REIT’s net rental income saw a decline, down £0.6m year-on-year to £11.7m, however like-for-like net rental income grew by 13%.