£2m Braehead refit to build on growth

ONE of Scotland’s largest shopping centres will receive a £2 million refit in the new year after its operator revealed more retailers want to open premises following the arrival of technology giant Apple and clothing chain Hollister.

Capital Shopping Centres (CSC) will move one of the escalators at its Braehead development, near Glasgow, and open up the newly-created restaurant area to make it more visible.

Mike Butterworth, who joined the company in January following the takeover of the Trafford shopping centre in Manchester, told The Scotsman he also has plans to increase the height of the shop fronts on the first floor to create a bigger impact.

Braehead was one of four centres for which Butterworth had responsibility after joining CSC. He was yesterday named as the company’s new chief operating officer, expanding his remit across all 25 of the firm’s centres in the UK.

Butterworth said: “Bringing Apple and Hollister to Braehead has meant we are already in talks with other retailers.

“The occupancy rate at the centre is probably just above the 97 per cent figure for the group as a whole. If you walk around the centre then you’ll see very few empty shops.”

Butterworth said talks were continuing with Renfrewshire Council on creating a masterplan for the area. CSC owns 105 acres around the £285m centre, which opened in 1999.

The group and its property development partners want to build £245m-worth of houses, offices and leisure facilities around the mall. But Butterworth said the plans were still at the discussion stage and it could be a further year or more before any proposals can be made.

His update on Braehead and the surrounding area came as CSC issued its third-quarter trading update.

Although the report did not include details of the trading performance of its individual centres, the group said that overall footfall had risen by 2 per cent year-on-year in the three months to the end of October, compared with a 1 per cent fall for the UK retail sector as a whole.

The company’s rent book continued to swell, with 56 leases signed during the quarter, adding a further £3m in income. But analysts noted the latest agreements represented 90 per cent of estimated rental value – compared to a year-to-date average of 95 per cent, with six larger shops dragging down the figure.

CSC warned: “We continue to expect a low-growth environment, a challenging retail market and a restricted financing market for real estate for some time, with the eurozone crisis creating more uncertainty and impacting investment decisions.”

Keith Crawford, an analyst at Peel Hunt, which last week upgraded CSC from “hold” to “buy”, said: “The stock remains our preferred defensive or store-of-value investment.”

Seymour Pierce analyst Sue Munden upgraded her rating from “sell” to “reduce” following the update. She added: “The share price has fallen back to a 16 per cent discount to consensus net asset value of 405p, which we believe is close to fair value.”

Richard Curr at Prime Markets advised investors to “sell into strength”.

CSC closed down 3.1 per cent at 329.3p.