Intu Properties has today released a trading update that reports an improvement in the letting market and in overall performance at centre level.
The latest results, following the firm’s annual general meeting (AGM,) show that its current strategy is continuing to deliver profit whilst also improving the retail landscape for consumers in many key regional areas.
According to the trading update, which covers the period from the 1st of January to the 6th of May, retailer demand at intu shopping centres has continued to improve, with 44 new long term leases having been agreed worth a total of £7 million in new annual rent. This is 10 per cent above the previous passing rent figure, and broadly meets expectations set in valuation assumptions for the period.
In addition, the update reveals that key operating metrics remained stable during the four month period despite the toll taken upon retail sales by the upcoming general election.
Year on year footfall was unchanged to date at intu’s major shopping centres and, although occupancy slipped slightly from the 95 per cent reading taken on the 31st of December 2014 to 94 per cent by the 6th of May, this can be explained by the seasonal fluctuations caused by the Christmas trading season.
While a number of regional shopping centres and high streets have been affected by retailer administrations in the first half of the year, intu remained relatively untouched, with only Bank, Blott and USC (which amount in total to just over one per cent of intu’s rent roll) entering administration and, as the latter two continue to trade, rental income has been relatively undamaged by their respective administration processes.
Chief executive of Intu Properties, David Fischel, believes that improving economic situations both in the UK and in the Eurozone are aiding in the firm’s growth.
He says; “The continuing improvement in the letting market and overall performance at centre level are encouraging.
“We are moving forward strongly on a number of fronts and particularly with our active development projects both in the UK and Spain.”
Intu is currently in the process of implementing a £1.3 billion investment programme, with cash and available facilities of more than £500 million as of the 31st March 2015 supporting this initiative.
This has allowed Intu to add to its development pipeline during the first four months of the year, with both intu Metrocentre and intu Bromley benefiting from restaurant projects designed to diversify the leisure mix at key UK destinations. In addition the £42 million restaurant and mall refreshment project at intu Victoria and the £19 million cinema and restaurant extension at intu Potteries (pictured) are both on schedule to open this autumn.
However, it is not only in the UK that Intu is enjoying a high level of success, as both Puerto Venecia and Parque Principado in Spain enjoyed strong footfall growth during the period.
This allowed Intu to gain shareholder backing for the acquisition of a new site in Malaga which will soon be transformed into a major shopping resort development – Intu is currently in discussions with a number of retailers and leisure operators regarding the possibility of a 2016 start for this project.
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