Retail failures knock Intu
SHOPPING centre group Intu Properties was hit by numerous retail failures in the first half.
In interim figures for the six months to the end of June, it said the retail environment “continued to be testing” with failures in the last 18 months representing annual rent of £35m.
However, letting activity, particularly at larger centres, has limited the impact to a 2.9% reduction in like-for-like net rental income.
Intu, formerly Capital Shopping Centres, owns the Trafford Centre and half of the Arndale in Manchester. Manchester’s Peel Group holds around 20% of the business which also operates 14 other retail centres.
Occupancy rates remain at the 95% level reported in the first quarter. Footfall was down 2%, but Intu said this outperformed the Experian benchmark which was down 4%. During the period it signed 95 new long term leases representing £23m in annual rent. Net rental income was flat at £181m as were underlying earnings of £68m, compared to £70m last year.
Overall revenue was down slightly on last year at £259.3, compared with £263.4m, although pre-tax profits were far higher at £194.3m, up from £70.2m. This was down to a significant change in the fair value of financial instruments, up to £184m, from £28.8m.
Intu is planning £1bn of developments and “major extensions” over the next 10 years to assets such as the Trafford Centre where the first phase of a 40,000 sq ft flagship Next store will open next March, and the Sealife attraction opened in June.
Chief executive David Fischel said: “We are delighted with the impact of rebranding the company and our regional shopping centres as Intu and the business opportunities the change is providing. Momentum across the whole company is significant with the important acquisitions in the period of Midsummer Place, Milton Keynes and Charter Place, Watford.
“We have strengthened our financial position with debt refinancings and equity issuance and advanced a number of investment projects which form part of our £1bn pipeline. Today we report steady occupancy and letting progress as signs now emerge of economic recovery in the UK.”
