Intu in crisis as pandemic slashes rents

INTU is holding crisis talks with banks and the Government after the coronavirus crisis wiped out two-thirds of its income.

The shopping centre group, owner of Manchester’s Trafford Centre, was already on the brink before the virus hit, and yesterday revealed it had received just 29pc of quarterly rents due this week.

It has put Intu in danger of breaching loan agreements, prompting bosses to plead with lenders for more breathing space and seek support via the Government’s £330bn bailout package.

But there are fears the distressed company may not qualify for state loans because its debt is not seen as ‘investment grade’.

Intu said it was looking at ‘all strategic alternatives’.

The hammer blow came as retailers such as Burger King, B&Q, Primark and Sir Philip Green’s Topshop withheld the payments to landlords because of pressure from the pandemic.

high Street shops and eateries have been ordered to close as part of the nationwide lockdown, with only grocers and other ‘essential’ services allowed to stay open.

It means businesses that cannot offer deliveries are without any source of income, prompting ministers to pass emergency laws to protect those who risk defaulting on rent from being evicted. But that in turn has left commercial landlords such as Intu, hammerson, British Land and Capital & Counties, out of pocket.

British Land said just 12pc of its retail units were open and cancelled its dividend, while Covent Garden landlord Capital & Counties said the ‘majority’ of its properties were shut and suspended a share buyback scheme.

Intu said it had £184m available in cash and loans as of March 24.

It had hoped to get a £95m boost from the sale of Spanish shopping centre, Intu Puerto Venecia, but said that was delayed until the middle of May at the earliest.

Matthew Roberts, Intu’s chief executive, said the business was in urgent talks with banks about waiving some of the conditions on its debts.

If the value of its property portfolio continues to fall it could be forced to make immediate repayments of £143m, while a 10pc fall in rental income would trigger demands for another £34m.