Intu shares tumble as shopping centre owner issues warning
The owner of Intu Metrocentre and Intu Trafford Centre is expecting like-for-like net rental income to be down by 9% this year following a wave of retail failures.
And the impact of company voluntary agreements from companies including Arcadia and Monsoon will continue into to undermine its performance in the first half of next year, Intu has warned.
The statement sent shares in the company plunging by 13% after the bell on Wednesday morning.
Intu chief executive officer Matthew Roberts admitted that the impact of CVAs was “slightly worse than expected” in the three months to 30 September. In a trading update he spoke about the challenging market conditions the company has been facing along with the rest of the sector, but also highlighted that footfall at Intu’s centres is outperforming industry benchmarks.
Indeed, overall footfall was up by 1.2% in the third quarter and 0.9% in the first nine months of the year. In the UK, footfall was up 0.4%, helped by the opening of an extension at Intu Watford and a leisure wing at Intu Lakeside. Excluding these two centres, UK year to date footfall is broadly unchanged, which is still a better performance than the sector as a whole.
Roberts also noted that the majority of its top 20 occupants are well capitalised, global businesses, which are less likely to embark on insolvency proceedings than UK retailers.
“While letting activity has been slower in the third quarter as some customers delay decisions due to continued political and economic uncertainty, we are still signing a good number of new deals with great brands,” he added.
In fact, the company scored a formidable win with the signing of Harrods’ first standalone beauty store, H Beauty. The 23,000 sq ft beauty destination is set to become an important draw at Intu Lakeside, which recently opened a £72 million leisure extension with only one unit remaining unlet.
Occupancy across Intu’s portfolio remains relatively high at 95.1%, despite experiencing a slight decrease from 97% in September last year.
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