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Edited Transcript of CAL.L earnings conference call or presentation 11-Sep-19 8:00am GMT

Half Year 2019 Capital & Regional PLC Earnings Presentation

London Sep 17, 2019 (Thomson StreetEvents) -- Edited Transcript of Capital & Regional PLC earnings conference call or presentation Wednesday, September 11, 2019 at 8:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* James Ryman

Capital & Regional Plc - Investment Director

* Lawrence Hutchings

Capital & Regional Plc - CEO & Director

* Stuart Wetherly

Capital & Regional Plc - Group Finance Director, Company Secretary & Executive Director

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Conference Call Participants

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* John Michael Cahill

Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst

* Miranda Sarah Cockburn

Panmure Gordon (UK) Limited, Research Division - Analyst

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Presentation

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Lawrence Hutchings, Capital & Regional Plc - CEO & Director [1]

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Well, good morning, everybody, and welcome to our 2019 half year results presentation. I'd like to start with a couple of introductions. Those of you who don't know me, I'm Lawrence Hutchings, Chief Executive Officer; and I'm joined today by our Finance Director, Stuart Wetherly; and in the audience, James Ryman, our Investment Director, is with us today as well to assist in answering any questions or queries you may have.

I'd like to move on to a summary of our results presentation for today. Firstly, we believe that we're delivering a very resilient operational performance. We believe the strategy that we launched in December 2017 is one of the key reasons for that strong relative operating performance. We acknowledged the market backdrop with the structural changes that are taking place in the physical retail sector and also the cyclical headwinds that we're seeing in the U.K.

We continue to focus on all areas of our business, and we believe that that's been a key contributor to our robust and resilient operating performance, and that includes the balance sheet. And we're announcing today some initiatives that will result in capital receipts for the business, will help assist and take some of the pressure off the balance sheet. And then in addition, you will have seen that today, we released the 2.4 announcement of a possible offer from Growthpoint Properties, Growthpoint being South Africa's largest REIT. As you can appreciate, I'm very limited in terms of what I can say about that. I'll need to refer back to the 2.4 announcement we made this morning. And as you'll understand, Growthpoint have 28 days to either come forward with the 2.7 or discontinue the discussions.

I thought before I hand it over to Stuart to go through the financials that we provide a quick overview of the, what I call, the operating performance for the business. Our footfall significantly outperformed the national index by 1.8% for the first half. We had over 37 million visits to our shopping centers. And if we look at the growth from 2017 when we launched the strategy, has been significant in terms of total shopper visits. That has allowed us, by creating vibrant trading places, is what we call it, that has allowed us to continue a high level of occupancy at 96.8%. We've undertaken 44 new lettings and renewals during the period. And that compares very, very favorably, in fact is in line with what we achieved in the first half of last year both by volume -- income volume, and by numbers of deals. This positive letting activity has allowed us to offset the impact of CVAs in the first half of this year. And we've continued with our investment and repositioning program to bring our centers into the community shopping center model to increase our exposure, which I'll talk more about after Stuart presents the financials in relation to how we're spending that CapEx and the impacts of that CapEx on our business. We've invested circa GBP 5.9 million in the first half.

I'd like to hand over to Stuart. Thank you.

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Stuart Wetherly, Capital & Regional Plc - Group Finance Director, Company Secretary & Executive Director [2]

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Thank you, Lawrence, and good morning, everyone. We consider these results resilient operating performance. NRI at GBP 25.2 million, GBP 0.8 million or 3.1% down on H1 2018 is a creditable performance given the impact of CVAs and administrations of GBP 1.1 million, and reflects our target focus on driving underlying income. And this translated into adjusted profit of GBP 14.8 million for the first 6 months.

Property valuations continue the trend of recent periods with London values -- sorry, proving relatively robust with negative sentiment weighing heavier on our regional assets. This has resulted in LTV increasing to 52%, a level the Board accepts needs addressing. And as Lawrence has mentioned, we've been focusing on various initiatives aimed at mitigating and improving the position. We'll cover more of these in later slides. We've also taken the approach of deferring the decision on the level of the interim dividend until the process with Growthpoint has progressed further.

There've been 4 CVAs in 2019 impacting our portfolio across 13 units. Old units either remain trading wherein one case has been relet on more preferential terms. In total, the 2019 CVAs are expected to impact H2 by approximately GBP 1.1 million or GBP 2.3 million on an annualized basis. We have worked hard to offset the impact of these, and this is reflected by our contracted rent being within 2% of the June, comparative from 2018.

Interest payable and the contribution from Snozone have remained stable from 2018. The movement in NRI has been partially mitigated in an adjusted profit level by further improvement in cost management, continuing our recent record of year-on-year efficiency improvements.

As noted earlier, the trend of recent periods has continued, with London assets proving more robust than the sectoral headwinds. Residential and other alternative use opportunities, most obviously the residential opportunity in Walthamstow which is not fully reflected in the value, helps provide and underpin.

We maintain a diversified debt structure with interest fixed at competitive levels and at least 3.5 years left on each of our asset-backed facilities. We have GBP 22 million undrawn of facility across the Hemel Hempstead and Group RCF to assist with funding further CapEx investment.

Finally, in uncertain markets, we consider it essential to maintain reasonable headroom and have been working proactively with our lenders. Following on from the changes the Hemel Hempstead and Group RCF announced earlier in the year, we've agreed a 12-month amendment to the Luton loan, under which a combination of short-term amortization and covenant relaxation helps provide significantly improved headroom. Lawrence?

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Lawrence Hutchings, Capital & Regional Plc - CEO & Director [3]

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Thank you. I'll sort of take a moment to reflect back on the strategy that we launched in December '17. We've maintained the strategy, and as I said earlier, we believe it's been a key driver in delivering a resilient operating performance. We said that it fell into 3 key areas at the time to redefine the community shopping center in the U.K. We thought it was ill-defined. Shopping centers were classified as either prime or secondary. We certainly believe everything that we've seen over the last 2 years indicates there's nothing secondary about smaller shopping centers in the U.K. They have a very viable role, but they need to be the right shopping centers with the right retail offer to reposition our assets into that community shopping center model through our master planning process; thirdly, to refocus our management team, which we've been very busy doing. And if we could achieve all of that, then we would deliver shareholder value over the medium term.

I wanted to focus very quickly on the repositioning, because we believe that's been at the heart of our, as I say, resilient operating performance for the first half. And that breaks into 3 key areas from our perspective. The first one is operations and marketing; the second one, leasing; and the third is development investment.

So just focusing on operations and marketing for a moment. That, for us, is really about how we make our customer proposition relevant to the communities in which we -- that we serve. And that enables us, where we've got high levels of relevance and where we can continue to refresh and reposition the offer, we're able to drive footfall, which creates vibrant trading places that delivers retailer performance.

In the leasing areas, really, our focus in leasing is around adopting a retail footprint in repositioning and remerchandising our centers in this community model very simply to reduce the amount of nondiscretionary merchandise we have -- sorry, discretionary merchandise we have and increase our exposure to categories such as grocery and personal, professional services that allows us of our low base rent of GBP 12 to GBP 15 a square foot. We can do this accretively, and that allows us to generate income and importantly income growth. And as Stuart has mentioned, that's been a key driver allowing us to offset a large part of the impact from the CVAs in the first half and effectively remerchandise and reposition these assets.

And then the third area importantly is about, we say, adding density, or I call it, maximizing the value of our real estate. So typically, we're the single or dual-level building in the middle of a town center, and in many cases, and certainly if we look at the London estate, surrounded by what is increasingly high-rise residential towers. So how do we take advantage of that opportunity? And James here has been spearheading that for us and a lot of it revolves around mixed-use, whether it's residential, offices or other, and I'll talk about that in a little more detail. But it's at the heart of maximizing value effectively, and we've made great progress on that over this first half.

So just turning to the operational KPIs. As I mentioned earlier, 37.2 million, so we're down in absolute terms very slightly. But keep in mind, going back to 2017 when we launched this strategy and started investing in repositioning these assets, we've actually grown footfall in real terms over that period, with plus 1.8% on a national benchmark. Importantly, which is something that I'm very focused on, is frequency of visit. And I recall, in Ilford, we undertook some focus groups and a customer turned around and said to us in the focus group, look, I -- yes, I go to Stratford, and I go there once every 6 weeks or so but I'm with you every week. And this is what I want from you when I come to see you, and we are very focused on what people want from us when they're there every week fundamentally.

Our Click & Collect business is up 19% and I'm keen to say that -- I'm keen to point out that, that for us, the Click & Collect and facilitating Click & Collect, is all about taking friction out of our guests, our communities' lives fundamentally, just making life easier for them. They can collect their parcels while they're with us every week. And our occupancy, which we've held broadly stable at 96.8%, which is a testament to the focus and commitment of our leasing group.

But talking about operations, I've been in this business for 30-odd years now, and I've had a lot of false fire alarms. So on the 22nd of July at about 7:30, well, my phone rang and someone said, we've had a fire alarm at Walthamstow, the center's on fire. I was -- I must admit I was a little bit dismissive to start with because it's happened a lot in my career, with a lot of false alarms in this business. I walked about 15 minutes to catch up with some people for breakfast, and now we're showing in the social media with the black smoke coming out of the top of the shopping center at Walthamstow. So it was a very short breakfast, I went straight to Walthamstow. But this -- first of all, our team did a phenomenal job. The fire started about 10 minutes to 8 in the morning, said it was largely empty, there was no risk to life. Anyone that was in the center, the gym was operational at the time, some of the retailers were restocking, all the procedures ran incredibly smoothly into plan, which is a testament to our team. I think the hard thing with operations in our business is when it's done well, everyone says, of course, that's exactly what should happen. No one applauds us for collecting the rent every quarter, no one applauds us for the fact the centers are clean and secure. But when something like this happens, it just reinforces the value of our platform and of our team. Managed to evacuate the center, obviously, a fire brigade. It was a very large incident, 20-odd appliances, fire appliances, but it was in a very, very isolated area of the shopping center. Effectively, here. And I'm very pleased to say that last Wednesday, we reopened 75% of the stores in the shopping center, which showed great performance, and we've had exceptional feedback from our retailers in terms of how we've handled this process, how we've communicated with them. The remaining 12-or-so-odd stores will reopen over the next 6 to 9 months. We're fully insured for income and for replacement, which is great news. But the center, largely up and operational.

But the greatest insight for me during this process has really been twofold. The first one is when we launched the community strategy, we said, how will we know we are successful when we have a strong community shopping center? And someone said to us at that time, someone external, they said, you'll know you're successful when people can't live without you being there. And this, to close the entire shopping center for a period of 6 or 7 weeks and the feedback from the community, everyone from MPs all the way down through the Council and local people, the feedback and response was just overwhelming, and people are saying to us how important we are in that local community, how essential we are.

And little things we forget about, the Boots store here that was destroyed effectively during the fire had all of the prescription records. So we managed to get in the second day, remove the filing cabinet -- fireproof filing cabinet with all those records with the Council's assistance, established a porta cabin out at the front of the center for Boots to continue to dispense their essential prescriptions to the local people. So we're the only Boots in that area, and it reminded me of something else. We often say in the business that we are part of the essential infrastructure within the communities, and Walthamstow has just reminded us how much we are in the central part of the community infrastructure. The community simply doesn't function when these facilities aren't there. And I think that's important to keep in context when we hear so much about the so-called death of physical retail. We don't believe that for a moment.

Moving on to leasing. As I mentioned, 44 new lettings, a total of GBP 3.1 million. I think importantly, I mentioned it earlier, that, that is on par with what we achieved in the first half of last year. So we think that's a great achievement, given the environment we're operating in. Our spread's 31% of previous passing rent. That's been flatted by a large, we will talk about with Tesco in Luton, but they are the numbers. Our premium TRV (sic) [ERV], 6.9%, and our WALE has held firm at about 7.2 years.

The graphs to the right of this slide, I think are very interesting. And the first one is about our leasing transactions and the volumes and values going back by half. This is the information that we put into the public domain over the last 3 years. And what that says to me is that our leasing achievements half-on-half are actually very consistent. And despite what we've seen in the wider environment, all the talk about income and income generation and people not leasing shops and closing stores, that we've been able to live a very, very consistent level of leasing volumes every half for the last 4 years, despite the market. And then our spreads on the lower table, and as you can see, we've managed to consistently deliver positive leasing spreads. And we believe a large part of that is because we're coming off what I effectively rebased average rents, which equate to between GBP 12 and GBP 15 per square foot.

And what has all this leasing done to our top 10 retailers effectively? As you can see here, we've been increasing our exposure, as we've set out in our strategy, to nondiscretionary items and there are a series of household names there. And importantly, below our top 10, we're diversified with over 400 different retailers and occupiers or tenants. So we have a very diversified income. And then importantly, all of this leasing has been to strategy in terms of allowing us to remerchandise away from the categories that we believe are more exposed to a structural change in retailing, department stores and fashion stores, for example, and allowing us to increase our exposure to things like supermarkets; express food, which is a growth category; grab & go food, we call it; leisure; and also importantly, nonretail uses and some of the brands that we've been leasing to and the names we've been leasing to during that period.

But I thought it'd be like this is an opportunity to peel the onion back another layer and just give you some insight into some of the specific projects we've been working on over the first half. In Luton, we've leased the remaining 13,000 square feet of what 3 years ago was a vacant office building on top of our shopping center, part of our estate. That is -- the final 13,000 square feet has also been let to the local authority, so the entire building is now let to the local authority on a 15-year lease. Clearly, we're seeing the benefits of having all those office workers sitting on top of us in terms of increased demand for grab & go food, increased patronization of services and obviously a significant leap in income, which is very helpful.

Importantly, we have a second office building in Luton which is vacant, which is -- has a 0 value in the valuation. And being able to lease the first building gives us an enormous confidence now to move on and start to move at how we bring the second building into life.

Sticking with Luton, I mentioned earlier, the Tesco lease renewal, we believe this is important. We've signed a new 8-year lease with Tesco. They're spending circa GBP 1 million refitting that supermarket. They wouldn't be investing that money if it wasn't a good business. It enhances our food store offer and secures long-term income for the business, which remains positive.

Moving over to Hemel, where we've seen enormous amount of attention and focus from an investment standpoint. As you know, we've announced the cinema project there with Empire Cinemas but we've -- on the back of that and the momentum that we've managed to build there, we've converted the former vacant first floor office or retailer, it's actually an eyeglass store, into -- we've secured a deal with PureGym. I think the interesting thing about that from my perspective is that we had 2 operators fighting for the same space. So we've managed to secure very strong commercial terms from PureGym, and it's great to have them with us in Hemel.

And whilst we're talking about Hemel and coming back to community effectively, we have announced a deal with Tinies. Anyone who's ever visited an IKEA and used the crèche, that crèche is operated by Tinies. They operate all the IKEA crèches. This is the first one they're going to operate outside an IKEA store. And for us, parent with pram is our #1 customer during the week. So this, for us, has spot on our demographic and our core customer. It's a service we're providing. It will be free with shopper receipts effectively, but it forms an integral part of these Family Zones that we've been launching with kids play, that we've done with The Entertainer, for example. We've been leasing in those areas, coffee shops, et cetera, we're seeing very strong leasing momentum around these Family Zones, build around, targeting our core customer effectively. So it encourages draw time and footfall, and we're really excited about working -- welcoming them to Hemel Hempstead in October.

But stepping back for a moment, we mentioned Walthamstow earlier. We've been working for over 3 years in Walthamstow. We achieved a planning consent for 450 apartments, as you're aware. We've released that to the market. We undertook a comprehensive marketing program in the first half of this year, a beauty parade, if you like, where we went out and spoke to both Build to Sell and Develop to Rent operators or BTR operators. We've had an exceptionally strong response. James Ryman here has been driving that process for us. We had offers materially ahead of book value. We're targeting circa GBP 20 million. We will have a partner appointment and fully documented by the end of this year. We're moving to have a preferred -- to moving to a preferred partner status at this stage. We've identified somebody, and we expect to realize a capital receipt in the first half of next year, based on a revised planning application. But this is a great example of how we're maximizing the value of our real estate. And we think there are direct routes here for Walthamstow -- sorry, from Walthamstow to Ilford where we have a similar opportunity. We have consented 200 residential apartments today. We believe we can add to that. And we believe we can move the lessons from here and the experiences straight across into Ilford and generate a similar capital receipt over time.

But in addition, I mentioned previously, that we operate on this master plan approach for our shopping centers. So how do we maximize value? How do we reposition? And then we said about delivering against that master plan very pragmatically, but the important thing is we work to our plan. We review those plans constantly. And part of that review, a vacant former petrol-filling station site behind the car park and behind the car park access ramp, and we took a view on a review of these -- of the master plan from Wood Green that this plan was surplus to our requirements. And we said about looking to crystallize value out of that landholding. I'm pleased to say we've done a great job here. We've achieved a conditional exchange with the Aitch Group, who are well-known small residential developers in the East and Northeast London, and they will bring forward a residential scheme on that site. Importantly, that provides a GBP 5 million capital receipt for the business by the end of this year.

And then turning to the wider CapEx program, I mentioned the master plan approach. We have set out circa GBP 47-odd million for the master land projects over the next 3 years. As I mentioned earlier, we're doing at about GBP 5.9 million for this year. But our priority projects at this stage, in Maidstone, we're very close to securing, and we're confident we will secure a tenant for the lower level of the former BHS, which will allow us to move towards solving all 4 of our BHS, and we've solved 3 of them already. So that is very good news. We've allocated some CapEx against that project. It'll have all the similar project that we announced previously with Empire which we're excited about, and of course, the gym that we've just mentioned there. The current projects that we're focused on delivering, very much around Family Zones and very much around food, grab & go food and leisure, which are growth categories from our perspective. We are still achieving 8% on average yield on cost, so these projects are accretive from an income standpoint. And certainly, with the leasing momentum we're seeing, we're confident that return will continue.

So in summary, we believe it's been a very resilient performance in the first half of this year. As I mentioned, we believe the strategy is core to what's been enable us -- what's enabled us to deliver this resilient performance. I would acknowledge the performance of our team during this first half as well. We accept that the market is challenging, both from a structural standpoint. This structural change continues to evolve. We believe we're very well placed with our focus on community and nondiscretionary goods, better placed than some of our peers, but we also acknowledge that there is -- there are cyclical headwinds as a consequence of the uncertainty -- broader uncertainty in the economy.

Our focus across the entire business continues. We've increased our focus on all aspects of the business, the balance sheet included. Hopefully, we've demonstrated. We've got line of sight to circa GBP 25 million within the -- with the initiatives that we've been outlining this morning.

And then just to conclude on the 2.4 announcement of possible offer that we made accompany our results this morning. As you can appreciate, I'm very limited in terms of what I can say about that. There is a process over the next 28 days. We're pleased that Growthpoint have expressed interest in our business. We believe it's a confirmation of our strategy and what we've been doing. But as you can appreciate, I'm going to be really hamstrung in terms of questions and then the answers I can provide you over and above what's in the statement, what's appeared in the statement this morning.

So thank you very much, and I'm happy to go to the floor for questions.

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Questions and Answers

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Miranda Sarah Cockburn, Panmure Gordon (UK) Limited, Research Division - Analyst [1]

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Miranda Cockburn, Panmure. You talked about the average rent of GBP 15 a square foot. Can you give a bit more granularity to that in terms of sort of the ranges, department stores, food and beverage, fashion, where those different areas sit?

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Lawrence Hutchings, Capital & Regional Plc - CEO & Director [2]

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So -- and it's also by geography, Miranda, as you would appreciate. So for an example, Blackburn has a lower average than maybe Ilford. Ilford does, for example. But specialty stores across [South East] run from circa probably GBP 15 towards GBP 18 a square foot on average, and department stores run from GBP 5 to circa GBP 7.50 a square foot on average. And then typically, the fashion categories, historically, if I go back 5 years or so, we're probably the most generative, rent wise, on a rent per square foot, but probably in recent times become less rent generative effectively, and that is a real opportunity for our business. As I say, I think those rents enable us to remerchandise accretively, whereas if someone's -- if we're seeing a shopping center, we've got GBP 60 or GBP 70 or GBP 80 a square foot rent. I think that's a -- it's certainly more challenging to replicate those levels of rent.

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John Michael Cahill, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [3]

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John Cahill from Stifel. On the leases again, I wonder if you could just perhaps give us some guidance on what proportion of the leases have a turnover element and comment whether that is rising as you go through the process, and if possible, maybe scope how -- what a typical lease would look like in that setup.

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Lawrence Hutchings, Capital & Regional Plc - CEO & Director [4]

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Yes. So a really good question. I'll let Stuart answer the specifics around how we treat any turnover deals that we do. Stuart, do you just want to pick up in terms of the stats that we produce?

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Stuart Wetherly, Capital & Regional Plc - Group Finance Director, Company Secretary & Executive Director [5]

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Yes. I mean just to say in terms of the comparative, the spreads we quote, we exclude the turnover element and any service charge caps. The figures aren't dramatically different for this period, but sometimes they can be skewed more, given it's a small sample size.

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Lawrence Hutchings, Capital & Regional Plc - CEO & Director [6]

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Typically, I would say that turnover-only deals are very, very rare for us, and large fit-out contributions are also the exception rather than the norm. Most of the retailers we deal with, they're not in a position where they're spending very large amounts of money on fit-out, as you would appreciate. And typically, the feedback we get from our retailers is, I just want a sustainable rent. I don't necessarily want that rent propped up with large incentives. They're credit problem for me later. So as you would appreciate, fitting out a Holland & Barrett store or a Timpson store, it will be different to fitting out a Ted Baker or a Zara store from a capital cost standpoint. So we think that firmly works in our favor. I think you'd count probably on a few fingers how many turnover deals we've done for the first half.

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Stuart Wetherly, Capital & Regional Plc - Group Finance Director, Company Secretary & Executive Director [7]

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I think we haven't seen any dramatic trend change. I mean maybe mild increase, but nothing significant.

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Lawrence Hutchings, Capital & Regional Plc - CEO & Director [8]

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And typically, we resist those sorts of deals pretty hard, to be honest with you. But yes, as Stuart says, we've not seen any dramatic uptick or increase over the last 12 months or a request for those deals. We think a lot of that is driven by the fashion operators, if I'm honest with you, which is a category where we've been deliberately, by intent, a lot less active.

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John Michael Cahill, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [9]

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But just a couple of general things, just looking at this as a general man, I'll come back all day on it. The valuation yields, it's just very interesting. I mean the London centers, 5.25, 5.5; Maidstone, 8; Hemel Hempstead, 7.7, what is the reason for this? Is the rental -- is there a big rental potential variation between the more inner ones?

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Lawrence Hutchings, Capital & Regional Plc - CEO & Director [10]

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No. I think the investment market has been -- it's been a trend over the last 12 to 18 months, to be honest with you. The investment market is increasingly distinguishing between London and areas, and in the Southeast and then areas outside London and in the Southeast, if that makes sense. So that's played itself out. We've seen greater degrees of cap rate expansion in the non-London, non-Southeast markets than we have in the London markets. And the view of the investment community and valuers is that there's still strong demand for London, basically. And those places elsewhere in the country, there's less investment demand, and that's reflected in expansion and capitalization rate. So is that fair, James?

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James Ryman, Capital & Regional Plc - Investment Director [11]

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Yes. It's a little bit more direct evidence in the last few years in things like square foot...

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John Michael Cahill, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [12]

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Transactions. Transactions.

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James Ryman, Capital & Regional Plc - Investment Director [13]

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Transactions underpin it.

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John Michael Cahill, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [14]

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Yes. Okay. Okay. And there was a plan, some huge plan for Wood Green at one point, wasn't there? And then there was a tremendous political performance. Is that still stuck?

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Lawrence Hutchings, Capital & Regional Plc - CEO & Director [15]

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Yes. It's -- I think you're maybe referring to the joint venture that the former Council entered into within lease, which involves selling the Council's housing stock, as I understand it, into a joint venture and allowing for the regeneration of large parts of the borough. There is a new Council in place, and that joint venture was dissolved as part of that new Council being installed. And we're very independent of all of that fundamentally. There is still an enormous amount of regeneration happening in the Haringey area, the wider Haringey area. Haringey is considered to be one of the strategic growth areas in London to address some of the housing shortage in a similar way to [Kordnis]. So I think the wider lend lease master plan perhaps is not proceeding. But from what we gather in our discussions with Council, they are still very proactive, as is the GLA, in unlocking the ability to deliver housing -- high-density housing within the Haringey area. And there are, in fact, a number of developments that are on-site or about to go on-site within walking distance of our shopping center to the -- to effectively to the west, about 3 blocks west of our shopping center. The old chocolate factory, for example, next to the rail lines, has been developed by one of the major house builders. So there is a lot of activity happening in Haringey.

Further questions? No? Well, I'd like to thank you all for coming this morning, and thank you for your continued support. Thank you. Have a great day. Thanks.