Apr 17, 2018
Intu reports record retailer demand in Q1
Apr 17, 2018
Shopping centre owner Intu has announced an impressive set of results, including record retailer demand and high footfall, while the wider British retail sector continues to fight to survive.
The company was upbeat as it revealed its first quarter results on Tuesday, saying it signed 60 new leases during the period. These included agreements with high-profile retailers including Zara and River Island, which trebled and doubled their flagship space at Intu Lakeside, and Abercrombie & Fitch, which chose Intu Trafford Centre for its second UK location.
It also signed 17 new leases in Spain, following last year's acquisition of Madrid Xanadú, and said the market entry was “well-timed” and delivering significant upside. The UK and Spanish leases were worth £10 million, 5% above the previous passing rent.
Additionally, Intu shopping centres enjoyed increased footfall year-on-year, if the periods of severe snow when some centres were closed, are excluded. According to this, footfall was up 1.5% in the UK, and increased by 7% over the Easter period. The company didn’t reveal footfall numbers for the whole quarter, including the period of bad weather.
David Fischel, CEO, commented: "Our prime shopping centres produced a strong first quarter with lettings at increased rents, high occupancy and footfall exceeding the comparable period last year, with footfall significantly and consistently outperforming the ShopperTrak national retail benchmark over the last five years.”
The company will open a £180 million extension at Intu Watford later this year, and a £72 million leisure extension at Intu Lakeside in 2019. £560 million will be invested in the UK portfolio over the next three years.
Over in Spain, Intu will begin construction of a £600 million world class retail resort near Málaga in the next 12 months.
“All this development activity is underpinned by a robust financial structure with cash and available facilities of £872 million and an active capital recycling programme,” said Fischel.
“As a result of this strong performance, we reiterate our guidance for like-for-like net rental income growth both for the current financial year, subject to no further material tenant failures, and over the medium term."
That mention to “material tenant failures” relates to a series of issues following a number of administrations and restructurings on the UK high street. Intu estimated that these processes will impact net rental income by £3.9 million in 2018.
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