• The company’s portfolio – comprising 16 shopping centres and retail parks – offers a combined gross lettable area of 350,925 sqm and has achieved a value uplift of 2.5%, with its gross value climbing to €1,118 million at the end of March 2023, including its shareholding in Lar España Real Estate
• In the 2022-3 financial year, it saw a 10.9% jump in gross rental income compared to the previous period and its rental collection ratio stands at over 99%
• Occupancy rose to 98.7% by the end of March, with the company closing 189 lettings in the last 12 months — 11% more than in the preceding financial year
• Castellana Properties was awarded three stars in its first GRESB assessment, as well as two EPRA Gold Awards —for precision and transparency in financial reporting (BPR) and for its sustainability policies (sBPR) — plus an special award for being one of the Socimis in Europe to see its scores improve the most compared to last year, also from EPRA
Castellana Properties today published its results for the fiscal year ended 31 March 2023. The company recorded net profit for the period of €46.5 million and gross rental income (GRI) of €64.7 million - up 10.9% year on year.
Net Operating Income (NOI) was up 9% on a like-for-like basis to €58 million. The company's portfolio of 16 shopping centres and retail parks, with a combined gross lettable area (GLA) of 350,925 sqm, registered a 2.5% value uplift to reach a gross value of €1,118 million at 31 March 2023, including its shareholding in Lar España Real Estate. The EPRA Net Tangible Asset value (EPRA NTA) increased with 4.9% to €646 million.
The company concluded 189 lease negotiations over this period — 104 new contracts and 85 renewals — 11% more than in the previous year. Covering a total area of 26,254 sqm, these transactions represent a new annual income stream of €7.3 million. The company continued to drive up its occupancy and collection ratios, coming close to 100% at 98.7% and 99.2% respectively, the highest figures achieved so far.
Record year for sales and footfall, outperforming the sector average
Castellana Properties’ shopping centres continues to flourish due to its active management style, reporting record sales of +6.1% and footfall at +6.9% since their acquisition in 2018. By both measures, its trading figures for the financial year are among the strongest in the sector.
Shopping centre sales increased 13.3% year on year (up 18.4% compared to the last normalized reporting period- 2019), significantly outperforming the sector average. Broken down by segment, the highest rate of growth was in entertainment and leisure (30.36%), followed by health and beauty (26.4%), food and beverage (23.9%) and DIY and handicrafts (25.52%). Fashion and Accessories, the sector staple, also performed strongly, with sales up 16.11% year on year.
Footfall has continued to recover steadily since Covid-19 restrictions were lifted. At the end of the financial year, visits numbers were up 1.2% on the pre-pandemic period. In fact, the first three months of 2023 saw footfall increased by 10.7% compared with the same period of 2022.
Backing the Spanish retail sector
Castellana Properties continued to pursue its financial investment programme throughout the financial year. In early 2021, Castellana acquired 21.7% stake in Lar España and in September 2022 the company intensified its exposure to the Spanish retail sector, increasing its ownership of the Socimi to 25.7%. This acquisition was made after an excellent opportunity was identified in capital markets, which offered both a high dividend yield and the potential to secure long-term potential capital value uplift. Lar España announced a dividend payout of €50 million or €0.60 per share, equating to a yield of 12% on Castellana Properties’ investment. This very promising acquisition is fully aligned with Castellana Properties’ strategy to continue investing in the retail sector and deliver maximum value to shareholders.
The company’s balance sheet remains strong, with an improved Net Loan to Value (LTV) reduced to 41.73% and 96% of the company’s debt is at fixed interest rate
Castellana Properties has continued to invest assertively in the properties in its portfolio, including ongoing value-add improvements to Vallsur shopping centre, one of the company’s flagship centres. An extensive redesign of the ground floor will make way for a wider range of leisure and dining options, in keeping with the current trend, particularly among younger consumers, to prioritize spending on experiences with friends and family over material goods. Representing a total investment of €16.7 million, the work has already begun and is scheduled for completion end of 2024.
Building a legacy of sustainability and innovation
Throughout the financial year, Castellana Properties continued to pursue the goals set out in its current ESG strategy, which runs until 2025. The company was awarded three stars in its very first GRESB assessment and two EPRA Gold Awards, receiving top marks from the association in two categories: precision and transparency in financial reporting (BPR) and sustainability best practices (sBPR). EPRA also gave Castellana Properties an special award for being one of the Socimis in Europe to see its scores improve the most compared to last year.
Among its most significant achievements are converting all of its properties to 100% renewable energy and awarding a contract for the installation of 370 electric vehicle charging points across its entire portfolio. Castellana Properties has also renewed its BREEAM Certification for all shopping centres (with outstanding scores), registered its carbon footprint with Spain’s Ministry for the Ecological Transition and the Demographic Challenge (MITECO) and developed a decarbonisation plan through its partnership with CRREM.
The company has expanded its innovation strategy with new initiatives, for example by working with The Retail Crew on the “New Retail Challenge”, which aims to offer fresh retail concepts to shopping centre visitors. More than 25 companies have signed up so far, competing for a share in a financial support package worth €100,000. It is also participating in the “Open Innovation Challenge” in association with EAE Business School Madrid. With spirited support from the business community Area101, the project has enlisted 25 postgraduate students to devise new business models for shopping centres and retail parks.
Castellana Properties CEO Alfonso Brunet said: “We are extremely proud to be able to share another set of excellent results, which are a testament to the excellent quality of our portfolio and our robust financial position. As we have shown, our commitment to the Spanish retail sector is unwavering and we have full confidence in its long-term potential. We are excited to look to the future of Castellana Properties as we move forward with our active management philosophy, focusing our attention on innovation and meeting our ESG objectives, while staying alert to opportunities with the potential to drive growth.”