Capital & Regional increased its net asset value by 21% in 2010 to 57p a share and returned to profitability.

The retail and leisure fund manager said its UK fund property valuations were up £197.2m with a total UK fund property return of 18.4%.

Property valuations in the UK funds are now 17% above the trough seen in the first half of 2009. 

Retail warehousing and leisure assets were particularly strong in the first half of the year whilst shopping centre valuations improved sharply in the third and fourth quarters. The Mall’s valuation improved 13% at the property level and 39% at the unit price level compared to the end of 2009, driven by the effects of gearing. 

Capital & Regional returned to profitability with pretax profits of £46.4m, compared to a loss of £113.4m in 2009. Recurring pretax profits, however, fell from £17.5m to £14.9m.

Capital & Regional has been working to reduce it debts with its adjusted see-through net debt to property value of 66% compared to 76% in 2009.

The Mall bond funding has also been extended for three years to 2015.

In 2010 the company sold 18 properties for £627.1m across the group, fund and joint ventures, with a group share of £117.8m, generating a profit on disposal of £4.5m.

At the fund level, the Mall Fund completed the disposal of seven assets for total proceeds of £340.8m during the year and completed the sale of Bristol for £50.2m shortly after the year-end. Following these disposals, the headline LTV for the Mall is now 72% which provides a property valuation headroom of 13% against the LTV covenant of 83% which will be tested for the first time in December 2011.

The Junction disposed of two assets for total proceeds of £142.3m during 2010 and has subsequently completed the sale of Portsmouth for £60.9m compared to the year end valuation of £55.4m. The LTV at year end is 60%, excluding £27.0m cash on the fund balance sheet, and this is after the distribution in the year, of which the group received £5.6m.

X-Leisure Fund’s disposal of two assets for total proceeds of £59.5m together with a growth in property values has contributed to lowering the Fund LTV to 56% compared to 68% at the end of 2009.

Capital & Regional also opened significant extensions at The Mall Blackburn and The Mall Luton and improved total UK fund occupancy to 95.9%, up 1.5%.

The acquisition of The Waterside Shopping Centre in Lincoln for £24.8m in January 2011 was the first acquisition since 2007.

John Clare, chairman of Capital & Regional, said: “Capital & Regional has made significant progress in 2010. A year which began with the continued degearing of group and fund balance sheets ended with a renewed emphasis on growth. Last month we saw the purchase of the Waterside Shopping Centre in Lincoln, the first acquisition by the Company since 2007.”