Impact of CVAs to be greater than previously expected
In its trading update for the period from 1 January 2019 to 2 May 2019, Intu Properties has said it expects rental income to fall further and faster than it previously expected.
Incoming chief executive Matthew Roberts said: “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 the uncertainties in the current political and retail environments. 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.”
However Roberts pointed out that operational performance in the quarter has been stable with 53 long-term leases signed amounting to £6m of annual rent at an average of 1% above previous passing rent.
Occupancy at 31 March 2019 was 95.6% down 0.5% year-on-year and down 1.1% per cent against December 2018. Footfall in the first quarter was down 0.2%, significantly ahead of the ShopperTrak UK benchmark which was down on average by 2.1%.
Roberts said the company was still considering the sale of its Spanish business and was investigating the possibility of restructuring loans secured on the intu Trafford Centre, which would facilitate the sale of part-interests in the mall.