Council points to ‘comprehensive agreement’ as intu teeters on the brink

How the redeveloped Broadmarsh would've looked

Intu’s “clear contractual obligations” to redevelop the Broadmarsh shopping centre have been pointed out in a fresh statement from Nottingham City Council.

Responding to news earlier on Tuesday that intu could be forced to close its 17 shopping centres if it enters administration this week, the city council has issued a statement to TheBusinessDesk.com saying that a “comprehensive agreement” is in place with the struggling mall operator.

City Council leader, Councillor David Mellen, told us: “Clearly, the current situation with the redevelopment of intu Broadmarsh is not where anybody wants things to be. It has been severely affected by the coronavirus crisis which isn’t something anyone could have envisaged. As owners of the land, we have been seeking improvements for many years from the owners of the shopping centre that will benefit the whole city by bringing new amenities, jobs and investment.

“Most people would agree that the centre was not fit for a 21st century city and badly in need of renewal. The redevelopment presented an opportunity to reduce the barrier the building presents to visitors from the south of the city and to upgrade facilities. Intu came up with viable plans to do this, focused on leisure alongside retail, and their contractors were progressing well with the project until the Covid pandemic struck, which caused a massive, unforeseeable shock to economies around the world, hitting the retail sector particularly badly.

“We have been in ongoing dialogue with intu about the future of the development. A comprehensive development agreement is in place for the project with clear contractual obligations and this is obviously a focus for discussions. This is a prime city centre site which we remain keen to see developed and we are actively looking at options that will bring that about.”

intu is suffering from a huge debt pile and unable to collect most of the rent owed to it due to a retail sector in shock from changing shopping habits and the coronavirus pandemic. the firm has also confirmed that it has appointed KPMG to put together a contingency plan for administration.

On Tuesday morning it issued a statement saying: “Notwithstanding the progress made with lenders, intu has also appointed KPMG to contingency plan for administration. In the event that intu properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration. In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres. If the administrator is not pre-funded then there is a risk that centres may have to close for a period.”

When contacted, intu sent a statement it had previously issued when it announced on Friday 12 May that it was closing the Broadmarsh centre to visitors, which said: “In March we paused the development work at intu Broadmarsh because of the COVID-19 pandemic and then more recently due to our financial position.

“We have been reviewing the site for a number of weeks now and it’s become clear that we can’t re-open our doors with construction at a standstill and the site the way it currently is. There are health and safety considerations to take into account and we’re not prepared to put anyone at risk. Safety is always our priority, and for that reason we have temporarily closed the centre.

“We know this will be disappointing news, but we feel that this is the responsible thing to do with visitor and staffing levels due to have risen from last Monday. The safety of our employees and visitors always comes first and that has guided this decision.

“We have let our people, our brand customers and our partners at the council know and we will continue to work with them on the future of the centre.”

intu’s share price remaind flat on Tuesday morning, trading at 4.65p.

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