Intu Properties on target with its plans to deliver growth

LISTED intu Properties, which owns nine of the top 20 super regional centres in the UK, reports that it remains on target to deliver growth in like-for-like net rental income for this year of between 3 percent and 4 percent.

The company yesterday also reported the disposal of intu Bromley for £177.9 million (R3.02 billion) and the successful pricing of an offering of £375m of guaranteed convertible bonds due in 2022.

It intends to use the net proceeds of the offering to complete its committed pipeline of developments of £212m over the next two years, including £152m related to the 400 000 square foot extension of intu Watford and refinance the R101m drawn on the revolving credit facility for the £410m acquisition of the remaining 50 percent of intu Merry Hill in June and finance asset management initiatives of £85m over the next two years to reposition the centre.

It would also provide sufficient overall financial facilities to enable the company to pursue further projects in the next 12 months. These projects include the leisure extension at intu Lakeside, the redevelopments of intu Broadmarsh in Nottingham and Barton Square at intu Trafford Centre and the development of the intu Costa de Sol shopping resort in Spain.

intu Properties said these initiatives were expected to be accretive to both earnings and net asset value a share after taking into account the offering.

David Fischel, the chief executive of intu Properties, said they expected the growth in like-forlike rental momentum to continue into next year, with good recent progress made on lettings and rent reviews.

“We continue to demonstrate the attractiveness of our top quality prime shopping centres to shoppers, retailers and global investors with increased footfall, good progress on lettings and rent reviews and the disposal of intu Bromley at a consideration above the June 2016 market value.

“The business has a pipeline of attractive organic investment opportunities in both the UK and Spain, which will enhance intu’s long term growth potential,” he said in a trading update yesterday for the period from July 1.

intu Properties said 67 new long-term leases were agreed in the period for £13m of new annual rent, which was 4 percent above the previous passing rent. It said 61 of these new long-term leases were in the UK and six in Spain.

Occupancy declined by 0.6 percent to 95.6 percent from 96.1 percent in June. But year-on-year footfall to date was up by 1.2 percent in the UK to outperform the Experian benchmark, which was down by 1.8 percent.

Shares in intu Properties dropped 2.55 percent yesterday to close at R47.76.