Co-investing fund manager Capital & Regional saw continued growth in the value of its funds in the first quarter of this year.

The £434m Junction retail park fund was the best performer, with the underlying property value rising 3.2% during the quarter, meaning a 9.4% rise in the value of the units when gearing is taken into account.

The rise was driven by income growth of 3.1% from letting activity, principally at the Maidstone and Thurrock retail parks. The net initial yield remained stable with an inward shift of 1 basis point on a like for like basis, following the sale of Portsmouth in March 2011.

The 2.4% valuation increase in the £541m X-Leisure fund was driven by an inward shift of 18 basis points in the net initial yield combined with stable income. The fund units rose 5.1% on a geared basis.

The £1.1bn Mall valuation increase of 1% during the quarter is driven by income growth of 0.8% from new lettings and lease renewals. The net initial yield remained stable with an inward shift of 2 basis points on a like for like basis, following the sale of Bristol in January 2011. The units rose 4.6% on a geared basis.

“This growth has been encouraging, given the challenging market conditions facing our retail tenants, and this resilience has continued into April with further lettings and renewals under negotiation,” Cap & Reg chief executive Hugh Scott-Barrett said.

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