The largest shopping centres owner in the country reports that even though the impact from the BHS closure is 1%, it’s more than enough as there’s more space for retailers now.
Intu, the company owning large shopping centres over Spain and the UK, says that it occupies 95.6% of the niche, which is a great index despite the drop of 0.6% since June.
The FTSE 100 group reports that 2 out of 10 shops have already found new owners, and the rest of them are still open for renting to improve the range of shops Intu has at its centres.
Despite all the good things, representatives of the company expressed their concern about the rental revenue fall in 2017 while the search for new tenants is in process.
The company still expects their 2016 like-for-like net rental income to be about 3% to 4% after increasing its target in summer. The company said footfall at its UK sites increased by 1.2 per cent between July 1 and October 25.
The company, which changed its name from Capital Shopping Centres in 2013, is the biggest owner of large regional shopping malls with a portfolio of 18 shopping centres across Britain, including Manchester’s Trafford Centre, Merry Hill in Dudley, and Lakeside in Essex.
It is moving its focus to larger super regional shopping centres rather than some of its smaller assets, and announced the sale of its 64 per cent stake in a shopping centre in Bromley, London, for £177.9 million to Alaska Permanent Fund Corporation. This was £2 million higher-than-expected compared to the valuation of £175.9 million made three days after the Brexit vote on June 30.
Intu said that the price showed “continuing investment demand” for UK shopping centres, despite market sentiment indicating a post-Brexit decline in values across many sectors, including retail property.
“Consumer confidence has remained robust and UK unemployment remains at low levels, but financial markets have been and are likely to continue to be turbulent,” Intu said.
As part of its investment plans, the company has also issued a £350 million bond offer to fund new projects including building new restaurants at Eldon Square in Newcastle, a revamp of its Watford shopping centre and building a new shopping resort at Costa del Sol.
It also announced that it had exchanged on 67 deals since the start of July, including six in Spain, representing £13 million in new rent and 4 per cent above previous rents.
Shares in the company rose 1.3 per cent to 287½p in morning trading.