Rental woes hit mall giant
Intu sees income fall as CVAs start to bite
BRITAIN’S biggest shopping mall owner Intu has warned that ailing stores requesting lower rents could see its rental income fall by 9% this year.
It revealed more than half the decline was down to Topshop owner Arcadia and Monsoon seeking special arrangements to cut their bills in a bid to restructure their businesses.
The owner of some of the nation’s flagship centres including Lakeside in Essex, Manchester’s Trafford Centre and the Metrocentre in Gateshead, said the Company Voluntary Arrangements (CVAs) which hit landlords in the pocket, would bite this year and in 2020, but stressed it was performing ahead of its rivals.
It blamed “political and economic uncertainty” for some stores holding back on signing new leases but added it was still attracting big names like Harrods and Zara to its shopping centres. Chief executive Matthew Roberts said: “In the last quarter, we have continued to face challenging market conditions along with the rest of the sector. In particular, CVAs were slightly worse than expected. In the face of these challenges, there is much that gives me confidence about Intu. “While letting activity has been slower in the third quarter as some customers delay decisions, we are still signing a good number of new deals with great brands.” Intu has a massive debt mountain and has vowed to sell off £2billion of assets to shore up its balance sheet. Occupancy levels have also fallen from 97% to 95.1% this year, with leases averaging 6.5 years compared with 7.4 years in 2018.