Intu warns of retail rental income drop
Written by Peter Walker
Intu has warned of a bigger drop in rental income this year, as struggling retailers close shops at a faster rate than expected.
In a market update ahead of its AGM, the shopping centre landlord said Brexit uncertainties were also having an impact on letting demand and it would suffer from a further rise in Company Voluntary Arrangements (CVA).
“We expect the remainder of 2019 to be challenging due to a higher than expected level of CVAs and a slowdown in new lettings as tenants delay their decisions due to the uncertainties in the current political and retail environments,” commented chief executive Matthew Roberts.
“As such, we have revised our approach to how we guide towards our year-end like-for-like net rental income to factor in expected CVAs and have adjusted our 2019 guidance accordingly to minus four to six per cent.”
Intu, which owns - amongst others - the Trafford Centre in Manchester, the Gateshead Metrocentre and Braehead in Glasgow, had previously forecast a drop of only minus one to two per cent.
Figures from the Local Data Company earlier this week showed that the number of shops lying empty rose by more than 7,500 last year. Retail chains hit hardest included Poundworld, Maplin, Toys R Us and Multiyork, all of which fell into administration.
Intu has also been hit by CVA plans being considered by High Street stalwarts Debenhams and the Arcadia Group.