Real Estate

Shopping centre landlord Intu faces swelling losses

Losses at shopping centre landlord Intu swelled in the first half of this year, a “challenging” period in which a series of retailers entered insolvency arrangements. 

The indebted group, which owns sites including Manchester’s Trafford centre, said it was keeping “all options under review” including raising equity as it battles to reduce its debt and combat falling rents and property values in the sector. 

Intu posted a loss of £830m in the six months to June, up substantially from £486m during the same period in 2018, the company said on Wednesday.

Net rental income declined 7.7 per cent on a like-for-like basis to £205.2m, while the value of the group’s portfolio of shopping centres in the UK and Spain declined by £872.1m — or 9.6 per cent on a like-for-like basis — to £8.4bn. Intu said it expected both measures to keep falling in the second half of the year. 

Net debt was down slightly to £4.7bn. The group will pay no interim dividend, after scrapping its final dividend for 2018 despite a tax penalty imposed on real estate investment trusts that do not distribute property income. 

Mr Roberts, who took over from David Fischel in April, admitted: “Intu . . . faces challenges. We are seen as having too much debt, with a tail of underperforming assets. Our relationships with tenants are seen as old-fashioned and our management structure has stopped us being as agile as we would like to be.” 

However he maintained that “the physical store is not dying, it is evolving” and said Intu would address its challenges in a new five-year strategy to include selling assets, cutting capital spending and improving relationships with tenants. 

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“Fixing the balance sheet is our top priority. We are making good progress on the disposal of our Spanish assets, the proceeds of which we will use to reduce our debt,” Mr Roberts added. 


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