Intu reports increase in footfall and says impact of BHS closure has been offset by new lettings in 2016
Shopping centre owner Intu reported today that footfall at its UK businesses had increased during the three months to 1 October – and said the impact of the recent closure of BHS stores around the country had been more than offset by new lettings in the year.
Intu, which announced today that it is to sell its 63.5 per cent stake in Intu Bromley to Alaska Permanent Fund Corporation for £177.9m, said footfall had risen by 1.2 per cent year-on-year in its UK businesses.
The group noted that BHS closed all its stores in the period. Of the 10 stores in the firm's portfolio, representing approximately one per cent of the rent roll, Intu said it has let the unit at Intu Metrocentre and acquired the long leasehold of the unit at Manchester Arndale. The remaining units are at various stages of negotiations and Intu said it "fully expects to re-let them through the rest of 2016 and in 2017 with an improved tenant mix".
And Intu added that new lettings in the year had "more than offset" the impact of the BT closure.
"We continue to demonstrate the attractiveness of our top quality prime shopping centres to shoppers, to retailers and to global investors, with increased footfall, good progress on lettings and rent reviews and the disposal of Intu Bromley at a consideration above June 2016 market value," said Intu chief exec David Fischel.
"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."
Meanwhile, in terms of outlook, the group said that since the EU referendum vote on 23 June, consumer confidence has remained robust and UK unemployment remains at low levels, but financial markets have been and are likely to continue to be turbulent. In the run up to the referendum, investment into UK shopping centres fell sharply to a four-year low.
"Sentiment in the overall UK property investment market since the vote would indicate a small decline in market values across many sectors including retail property," Intu said today.
"However, little transactional evidence is available for prime UK shopping centres, and our disposal of Intu Bromley at a consideration above the June 2016 market value is indicative of the continuing investment demand in this sector."
Shares in Intu were down 1.1 per cent this morning.