realestate

Intu chief steps down as restructuring begins


The head of Intu has stepped down, a week after the shopping centre group entered administration following the collapse of last-ditch negotiations with its lenders.

Matthew Roberts, who took over as chief executive of the company in April 2019, told staff on Friday that he had resigned from the company, according to people with knowledge of the situation.

Mr Roberts had attempted to steady the heavily indebted mall owner and chart a course back to profitability, but a number of lenders to the company, including The Canada Pension Plan Investment Board, refused to support his plans, which included a pause on debt repayments for up to 18 months. 

The departure of Mr Roberts, who served as Intu’s chief financial officer for nine years before taking on the chief executive role, was first reported by Sky News. 

Intu is now in the process of a restructuring, overseen by consultancy KPMG — a task made more challenging by the complex ownership structure of its 17 malls. The company’s shopping centres — which include the Trafford Centre and Arndale in Manchester, Lakeside in Essex and MetroCentre in Gateshead — are held across a series of subsidiaries. 

The structure was intended to preserve the company at group level even in the instance that an individual centre faced financial difficulties. But with income collapsing across the whole portfolio as retailers were forced to close by coronavirus, and a pre-existing debt pile of £4.5bn, the group ultimately buckled. 

Intu’s problems stemmed from “an overly complicated structure, a lack of disclosure about the debt and a management that significantly underestimated the Amazon effect”, said Mike Prew, an analyst at Jefferies. 

The Trafford Centre, the most valuable of Intu’s properties, may be sold as part of the restructuring, he said. 

Mr Roberts had attempted to chip away at the company’s debt, selling close to £600m of assets, including malls in Derby and Valencia. He had also sought to strengthen the balance sheet with a £1.5bn equity raise earlier this year, which ultimately failed.

KPMG declined to comment on Mr Roberts’ departure.

Rival shopping centre owner Hammerson said on Wednesday that it had collected just 16 per cent of the rent it was owed for the three months to October. Intu has not disclosed how much it had received.

Mr Prew said the sale of Intu’s assets under pressure risked causing “a domino effect” across the sector that would push down prices.

Shopping centre owners have “had a rose-tinted view of valuations which is largely theoretical because nothing much has traded in the last few years”, he added. “Intu will create something close to the clearing price for shopping centres, meaning a substantial and permanent correction in the pricing structure of shopping centres. There’s no way back.”

Additional reporting by Tabby Kinder



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