• Castellana Properties currently manages a portfolio of 16 shopping centres and retail parks, with a combined gross lettable area of 350,271 sqm and a gross value of €1,091 million at March 2022, equating to a 4.5% y-o-y value uplift
• Gross rental income grew by 3.06% to €58.8 million and the company is now receiving almost 99% of its rental income
• The company's average debt maturity has improved from 3.5 years to 5 years on the back of a €185 million 7-year financing agreement with Aareal Bank A.G..
• Castellana Properties has obtained a long-term BBB- Investment Grade rating with a ratings outlook of stable by Fitch, the internationally renowned credit rating agency
Madrid, 31 May 2022. Castellana Properties, the specialist listed retail property firm, today published its results for the fiscal year from 1 April 2021 to 31 March 2022. The company posted net profit for the period of €46 million and gross rental income (GRI) of €58.8 million, up 3.06% year on year and 3.8% versus pre-Covid levels.
Net Operating Income (NOI) was up 5.94% on a like-for-like basis to €54 million and the company's portfolio of 16 shopping centres and retail parks, with a combined gross lettable area (GLA) of 350,271 sqm, registered a 4.5% y-o-y value uplift to stand at a gross value of €1,091 million at 31 March 2022. The EPRA Net Tangible Asset value (EPRA NTA) climbed 23.1% to €616 million.
Over the course of the year, the company completed 170 lettings - 118 new leases and 52 renewals - equating to a total floor area of 36,366 sqm, and new rental income of €9.5 million. The company again maintained its strong occupancy rate at 98.4% and was receiving almost 99% of its rental income at the end of March.
Sector-beating footfall and sales
Retail sales at Castellana Properties shopping centres over the last year were up by 2.21% versus pre-pandemic figures, outperforming the sector average. By sectors, the top performers were the pet industry, which posted 71.4% sales growth, DIY with growth of 38.9%, sports with 7.0% and culture and gifts with 1.5%, followed by electronics and food with 1.2%. The sectors that were hit hardest by the Covid-19 pandemic, such as leisure and food and beverage, recovered gradually and consistently over the course of the year. At the end of March, revenues in the F&B sector had recovered to 90% of pre-pandemic levels, while leisure sector revenues climbed to 65% for the year as a whole and stood at over 70% throughout the second half.
Footfall has rallied to almost pre-pandemic figures and continues to improve every month.
Committed to Spanish retail
The company agreed the sale of two office properties let to Konecta in Madrid and Seville to a European fund for €26.5 million, an increase of €4 million on the initial acquisition price. The sale of these non-strategic assets formed part of the company's strategy of positioning itself as a retail REIT which actively manages and invests in core assets.
The firm also resumed its investment programme by acquiring a 21.7% stake in Lar España Real Estate, with a 48% discount on the Net Tangible Asset Value. This highly attractive financial investment, which combines both a strong dividend yield and compelling long-term potential capital value uplift, positions Castellana Properties as the largest shareholder in Lar España Real Estate. The two companies share a closely-aligned strategic approach and Lar España's extensive, quality portfolio perfectly complements Castellana Properties' own investments.
Over the last fiscal year, Castellana Properties maintained its active management policy, completing repositioning projects at its shopping centres in Los Arcos (Seville), El Faro (Badajoz) and Bahía Sur (Cadiz). A total of 51 new brands opened new premises at these centres, equating to close to 38,000 sqm, and a total project CapEx investment of €71 million generating additional net operating income (NOI) of €4.5 million and a net return on investment of 6.32%.
Backing from top lenders
Castellana Properties secured a €185 million 7-year financing agreement with Aareal Bank A.G., allowing it to improve its debt maturity schedule and extend its average debt maturity from 3.5 years to 5 years. Castellana Properties has therefore refinanced 40% of its assets, a clear indication of the confidence financial institutions have in the company following its excellent performance in recent months. The Company’s Net Loan Value (LTV) stands at 43.04%, 4.88% less than in March 2021.
Castellana Properties, a listed company specialising in the retail sector has also obtained a long-term BBB- Investment Grade rating with a ratings outlook of stable by Fitch, the internationally renowned credit rating agency. The strong results and the resilience and quality of the company’s property portfolio, has led Fitch to take a positive view of the firm’s active management and its stable portfolio profile. The rating agency also looked favourably on the dominant position that its shopping centres and retail parks benefit from in their respective catchment areas, on the new leases and rental increases signed, its improved cashflow and the recovery of footfall and sales, among others.
A strong ESG strategy at Castellana Properties
The company has designed a strategic plan for the period until 2025 featuring eight core sustainable development goals, including rolling out renewable energy use across 100% of the portfolio, implementing an ISO 50001 compliant energy management system, launching campaigns to raise awareness of circular economy initiatives and reporting the company's carbon footprint to Spain's Ministry for the Ecological Transition (MITECO).
As part of the company's ESG strategy, 100% of its shopping centres now boast BREEAM certification, which recognises excellence in the environmental management of buildings and assesses sustainability levels. Its portfolio of properties received a mix of ‘exceptional’, ‘excellent’ and ‘very good’ ratings on conclusion of the assessment process.
The Company has also achieved an EPRA Best Practices Recommendations (BPR) Gold Award in its third year of taking part in the scheme, in a ringing endorsement of its transparent financial reporting. The awards were introduced to recognise and commend the efforts of real estate companies exemplifying successful adoption of EPRA (European Public Real Estate Association) guidelines for financial and non-financial reporting.
Castellana Properties CEO Alfonso Brunet said: “We are extremely proud to announce these very positive results, which clearly reflect the excellent quality of our portfolio and our robust financial position and underscore the strong potential offered by the Spanish retail sector. Over the months ahead we will continue to deliver on our active management philosophy with an unwavering focus on ESG and innovation, whilst simultaneously analysing attractive investment opportunities to underpin continued growth.”