CSC Creates National Brand and New Digital Offer

15 JANUARY 2013

CAPITAL SHOPPING CENTRES GROUP PLC

CSC ANNOUNCES CREATION OF NATIONWIDE CONSUMER-FACING SHOPPING CENTRE BRAND AND TRANSFORMATION OF ITS DIGITAL PROPOSITION

KEY INITIATIVES, BENEFITS AND TIMELINE

With 320 million customer visits and over 30 million unique visitors a year, Capital Shopping Centres is the UK's leading specialist shopping centre owner, developer and manager. This scale and specialism gives us a unique insight into today's consumer and what they are looking for from their shopping experience.

CSC has the physical scale to establish a strong national brand to integrate the online and shopping centre retail experience. Today we are announcing a £25 million investment to create a nationwide consumer-facing shopping centre brand, intu, and a transformed digital proposition.

Key initiatives:

·; Creation of a single brand, intu, to be incorporated into the names of the company and our directly-managed centres  

o providing a compelling national proposition for retailers and other commercial partners

o supported by a "World Class Service" approach from our 1,800 staff

o involving refreshing changes to our centres' physical environments

·; Integration of the physical and digital environments to provide a seamless multi-channel experience for our visitors through

o installation of a new fibre optic network for every centre

o provision of high quality free WiFi throughout the malls

o the launch of intu.co.uk, a transactional, fashion-focused, mobile-enabled website

·; Overall investment of £25 million, comprising £7 million on brand creation and roll out, £8 million on digital infrastructure and £10 million on the acquisition and start-up phase of intu.co.uk

Benefits:

·; For visitors: improved customer experience, including additional digital services

·; For retailers: higher spend both in-store and online from enhanced footfall, dwell time and customer service. Effectiveness of centre-by-centre marketing spend much improved as the unified brand reduces duplication. National awareness and marketing opportunities increased

·; For our people: a more dynamic, creative and engaging culture, focused on customer experience and supporting innovation and personal development

·; For our investors: driving income through enhanced propositions to consumers and retailers,consumer spending on new value-added services and new revenue sources such as national commercial partnerships, digital commissions and advertising

2013 timeline:

·; On 18 February 2013 CSC will change its name to intu properties plc

·; In March Trafford Centre will launch free WiFi, followed by Lakeside in April, Eldon Square, Newcastle, in May and all centres by February 2014.  

·; From March to June all our 1,800 staff will attend training in World Class Service

·; In April 2013 intu.co.uk, our new eCommerce site, will be launched

·; From May 2013, the intu brand and visual identity will be rolled out across our centres in the form of physical signage, enhanced customer service desk facilities and national consumer activity commencing with a major launch event

David Fischel, Chief Executive, commented:

"With over half the UK population visiting our shopping centres each year, we have the scale to seize the opportunities provided by the changes in the retail marketplace. We are investing £25 million in digital infrastructure, an eCommerce website and a new brand. We very much look forward to implementing the initiatives announced today, which mark an exciting next phase in the evolution of our market-leading UK shopping centre business, to the benefit of customers, retailers, staff and investors. "

A conference call with analysts and investors will take place at 08.15 GMT on 15 January 2013. This announcement will also be available at www.capital-shopping-centres.co.uk

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CAPITAL SHOPPING CENTRES GROUP PLC ("CSC") TODAY ANNOUNCES CREATION OF A NATIONWIDE CONSUMER-FACING SHOPPING CENTRE BRAND AND THE TRANSFORMATION OF ITS DIGITAL PROPOSITION

Elevating the role of our centres

The Group has been providing shopping experiences for decades - today we are setting out details of our initiatives to take the consumer experience to the next level.

CSC has the physical scale and reach to establish, through a national brand and digital innovations, a seamless multi-channel retail experience.

We own and operate some of the best shopping centres in the strongest locations right across the country, including ten of the UK's top 25. You can find every one of the UK's top 20 retailers in our centres alongside some of the world's most iconic global brands. Two thirds of the UK population live within a 45 minute drive of a CSC centre.

With 16.6 million sq. ft. of retail space, valued at £7 billion, our centres attract over 320 million customer visits a year (Appendix 1). Our centres' websites were accessed during 2012 by 9 million unique devices, of which 50 per cent were mobile, and attract 1 million monthly visitors.

We have been at the forefront of UK shopping centre evolution since the 1970s and have focused on creating compelling destinations for consumers with added theatre. To that end, last year we announced plans for an investment of £1 billion over the next ten years on active management projects and major extensions of existing assets.

With the initiatives announced today, we are seizing the opportunities presented by the fundamental changes taking place in the UK retail marketplace and the new technology available to us. With an investment of around £25 million in our infrastructure and teams, we will create:

·; a national brand ("intu") with 30 million unique visitors a year across the UK

·; a new digital experience in our centres and beyond

We will focus all our teams on an enhanced service ethos based around our clearly stated core values - creative, bold and genuine.

Our objective from these initiatives is to generate a stronger relationship with consumers, delivering more frequent visits, longer dwell time and increased spend. This will in turn enhance our proposition to retailers and open new sources of income. We aim to reinforce our market leadership position as we elevate our centres' role in people's daily lives.

Opportunities in the changing marketplace

Retail change is accelerating. A safe, clean, functional place to shop is no longer enough if it fails to spark the imagination or emotionally engage. People are increasingly blurring the boundaries between shopping, eating and entertainment.

Consumer activity and retailer investment has been focusing increasingly on the top centres such as CSC's. These offer a compelling mix of global and national retail brands trading out of flagship stores combined with a wide choice of places to eat, drink and be sociable.

The consumer opportunity

The scale of our operations provides us with a unique insight into and understanding of these changes. Last year, as well as traditional demographic customer research, we conducted in depth ethnographic studies of a series of customer "missions", considering the entire journey from home to centre and back again. We looked at each group's motivations and reasons for visiting and compared this to their actual experiences at CSC's and other landlords' centres.

Our research confirmed that a visit to a shopping centre is about far more than just shopping. Our customers value, for example, spending time together, discovery and something to entertain the whole family. Their experience is influenced by a range of physical and emotional drivers. This research highlighted a massive opportunity for us to deliver more to consumers, creating value for intu properties plc ("Intu").

Technology as an enabler

Technology has facilitated further blurring of boundaries. Long-standing shopping habits are altering radically, with new channels involved in all aspects of a purchase. Estimates indicate that almost half of UK internet users now make use of the internet at some stage of the shopping process, over 10 per cent of UK retail sales are now online and two thirds of all UK consumers have researched online before buying in store.

Use of mobile devices for research and buying has exploded in the last two years. Research has shown that by mid 2012 over half of fashion consumers had used a mobile device to make purchases and almost two thirdsof smartphone owners had used their phone in purchase processes.

Online shoppers tend to be more affluent, especially smartphone users. Retailers have generally noted that shoppers using more than one channel spend more overall than those using a single channel.

Multi-channel retailing

The best retailers recognise the importance of operating coherently through multiple channels, combining the website and physical experience to increase brand loyalty and sales across the business.

Online messaging encourages customers to visit stores. In turn, in-store experiences are enhanced by digital functionality. A flagship presence in the highest footfall destinations such as CSC centres is key to overall brand reach.

This synergy between online and physical retailing is demonstrated by click-and-collect and return to store facilities. These offer additional flexibility and convenience to consumers and, for retailers, fulfilment efficiencies and incremental revenue.

Summary of key initiatives

Intu will build on CSC's strength as the UK's leading specialist shopping centre owner, developer and manager to seize these opportunities.

Through a series of initiatives starting today and intensifying through 2013, the experience of CSC's visitors will be revolutionised under a new banner:

·; we will launch a consumer brand, intu, across our directly-managed centres, which will provide national coverage and recognition

·; we will provide "World Class Service" in each of our centres, offering a customer experience of surprise, delight and variety

·; we will make visual changes to our centres' environments with elements of the new brand appearing in refreshing ways

·; we will provide free, high quality centre-wide WiFi through a new fibre optic Cisco network

·; we will launch intu.co.uk, a transactional, fashion-focused, mobile-enabled website which will offer our retailers' products, available for collection in our centres, as well as high quality editorial content

·; intu.co.uk will also provide content to amplify our social media dialogue with consumers and further improve the reach of in-centre events

·; we will use our national scale to stage uniquely creative events for our customers

These changes will be rolled out in all of CSC's 12 directly-managed centres.

A nationwide consumer-facing brand

National brand

The names of the company and our centres will change (see Appendix 2 - To view Appendix 2, please paste the following URL into the address bar of your browser http://www.rns-pdf.londonstockexchange.com/rns/5026V_-2013-1-14.pdf). Their identity will communicate to visitors the added benefits of being part of the intu family while retaining local characteristics and prominence. They will become associated with each other and with Intu's nationwide digital and social media presence.

The three core values which we have embraced for Intu, to be creative, bold and genuine, will affect every staff member and each business relationship.

Our national brand will:

·; provide the essential foundations for the delivery of the new customer experience

·; improve the clarity of our messaging to retailers, particularly in respect of our scale, reinforcing our position as the market leader

·; much improve the effectiveness of our £12 million annual centre-by-centre marketing spend. We currently operate 15 different shopping centre brands which are locally recognised and respected but which individually have limited reach. The unified brand will reduce duplication and increase national awareness

·; provide a compelling proposition for national commercial partnerships through the combined firepower of our property portfolio and digital channels. We have already attracted for example Paramount for film promotions, Elite Model Agency for a national model search and Look magazine for national fashion campaigns. A unified brand will reinforce our unique reach

·; enable our people to rally around a more dynamic, creative and engaging culture, focused on customer experience and supporting innovation and personal development

World Class Service

During 2012 we piloted a customer service programme at Braehead, entitled "Scotland's Best", which was based on Trafford Centre's long-standing World Class Service. The pilot proved highly successful, with improved customer ratings in all categories and more than three quarters agreeing that "we are going the extra mile". The programme will now be rolled out across all our directly-managed centres.

All of our staff will take part in workshops over the next few months to create understanding of our cultural shift and to embed the principles of our customer service ethos. Everyone will have the support and operational framework to put the vision into practice within their team for the benefit of the wider business.

Delivering a seamless multi-channel experience for our visitors

Our aim is to transform our digital proposition and for intu.co.uk to provide the UK's leading digital shopping centre experience. We are investing in infrastructure and teams to enable us to develop new value-added services with a personalised touch.

Consumers will be able to buy online around the clock from our centres' websites or intu.co.uk, for delivery to home or one of our centres. Within our centres, our customers will be connected to high quality WiFi, enabling them to stay in touch with news and social networks, stream and watch video and be open to receiving relevant mCommerce messaging (on request). WiFi will also facilitate shopping research and access to retailers' websites.

Most of CSC's centres were constructed without integrated cabling networks. Our approach is to deliver the latest high quality technology across the portfolio. To this end we are rolling out our own future-proofed, centre-wide, high capacity fibre optic cabling and WiFi networks:

·; installing 115 miles of cabling, 1940 WiFi access points, intelligent Cisco network and resilient 100MB data communications links

·; enabling WiFi throughout our centres with a minimal one-off registration, making the internet and social media accessible throughout the visit

·; direct ownership of the network and WiFi technology enables Intu to influence the entire customer journey and experience

·; enabling expansion of our digital services, mobile customer service offerings and improved in-centre footfall and dwell analytics

·; providing a platform for interactive technologies such as augmented reality (AR), quick response (QR) code scanning and near field communication (NFC)

·; the comprehensive network will allow for the integration of operational systems to increase our responsiveness, effectiveness and efficiency

We have acquired a transactional, mobile-enabled website with a curated range of fashion-oriented products:

·; to be launched as intu.co.uk in April 2013

·; building on our centres' websites' 9 million unique visitors and 1 million monthly visitors

·; offering products from a range of retailers

·; features will include a single checkout for purchases from multiple retailers, virtual fashion events, high quality lifestyle editorial content, curation by fashion stylists and a click and collect facility in intu centres

·; direct revenue will be derived from sales commissions and digital advertising

·; further revenue from events offerings and digital services

·; the site's existing start up and development team are remaining with the business

Each shopping centre already has Facebook and Twitter sites, with a doubling in followers/likes last year. Downloads of our four centre-specific apps quadrupled over the same period. 

£25 million investment

We are planning an overall investment of around £25 million in our infrastructure and teams over 3 years. The principal components are physical rebranding in our centres and employee engagement, digital infrastructure and the eCommerce site:

·; we anticipate that the national roll out of Intu's visual identity, largely physical changes at centres, and our employee engagement programme will require an investment of around £7 million. Most of this will be accounted for as an exceptional cost in 2013

·; we expect capital investment in digital infrastructure at the centres to total around £8 million. This will be depreciated over an average of 10 years

·; during 2012, we acquired a start up transactional website business for £1 million plus a three year earn-out of up to £4 million, to be launched in April 2013 as intu.co.uk. We expect to invest a further £5 million over the next three years before the business reaches break even levels of trade

2013 timeline

On 18 February 2013 CSC will change its name to intu properties plc.

In March Trafford Centre will launch free WiFi, followed by Lakeside in April, Eldon Square, Newcastle, in May and all centres by February 2014.

From March to June, all 1,800 staff will attend training in our new customer service approach, World Class Service.

On April 2013, intu.co.uk, our new eCommerce site, will be launched.

From May 2013, the new brand and visual identity will be rolled out across our centres in the form of physical signage and national consumer activity commencing with a major launch event.

Multiple opportunities to drive improved financial return

CSC's operational and financial return is driven by the virtuous circle of positive customer experience generating footfall, dwell time and spending, providing the environment to which leading retailers are attracted and in which they flourish.

Intu will benefit directly and indirectly from the combination of:

·; enhancing footfall

·; improving dwell time

·; increasing average spend

·; improving retail mix

·; new sources of income such as national marketing partnerships, transactional website, value-added customer services and digital advertising

The enhanced intu experience will engender deeper visitor engagement and loyalty. In turn, this stronger proposition to retailers and catering and leisure operators will improve the tenant mix and feed through to an improved financial outcome.

Appendix 1 - our scale

Portfolio key facts

* Proportion of customers within UK social groups A, B and C1, defined as members of households whose chief earner's occupation is professional, higher or intermediate management or supervisory. Compares to UK average of 57%

Appendix 2 - brands

To view Appendix 2, please paste the following URL into the address bar of your browser 

http://www.rns-pdf.londonstockexchange.com/rns/5026V_-2013-1-14.pdf 

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