Trafford Centre owner Intu to upgrade Barton Sqare

TRAFFORD Centre owner Intu Properties saw like-for-like rents slip last year but it is optimistic after investing in its estate.

In the year to December revenues rose by 1.5% to £533.2m. Operating profit was up to £450m from £387m and pre-tax profits more than doubled to £362.9m from £152.6, although this figure included a credit of £275m from derivative financial instruments, up on £30m in the prior year.

Like-for-like net rental income was 1.9% lower in 2013, with a narrower 0.9% decrease in the second half. But overall rental income grew by nearly 2%. During the year Intu signed 201 long-term leases for £42m new annual rent at an average 4% above previous passing rents.

Intu, formerly Capital Shopping Centres, also owns half of the Arndale in Manchester and 14 other retail centres. Manchester’s Peel Group holds around 20% of the business.

It said the Trafford Centre benefited from an increase in headline rent and the “satisfactory conclusion” of 2013 lease expiries and rent reviews, as well as market yield improvement. According to the group the Arndale continued to benefit from “national evidence of stronger yields for top centres in major cities”.

It is planning to add a second floor to the Barton Square part of the Trafford Centre, with a major fashion retailer in talks to take a flagship unit there.

Into said: “Having received planning consent to increase overall space and broaden the range of uses at Barton Square, we are in advanced negotiations with a major fashion retailer currently not represented at intu Trafford Centre for a flagship store on a new second floor.

“The enabling development, which we expect to start this year to complete in 2015, will include an impressive glass roof to enclose the central courtyard.” 

Chief executive David Fischel said: “Intu advanced significantly in 2013 with a rebranding, strategic acquisitions, debt refinancing, equity issuance and key planning consents for our £1.2bn development programme.

He added: “With the economy appearing to improve and total profit for the year including revaluations increased from £159m to £364m, we are prepared to withstand some minor reduction in like-for-like net rental income in the short term as we continue to invest in our centres to drive their total returns through our robust asset management approach, tenant mix repositioning and development projects.”