4th May 2016 10:41
LONDON (Alliance News) - Intu Properties PLC on Wednesday said there has been little impact on customer footfall from any volatility in financial markets ahead of the EU referendum vote, instead affirming its net rental income growth target for 2016 and noting its operational metrics have remained strong in both the UK and Spain.
Intu said it remains on track to deliver like-for-like net rental income growth of 2.0% to 3.0% for 2016. For the period from the start of 2016 to May 4, footfall grew 1.4% year-on-year, and Intu's occupancy rate was slightly higher, up to 95.3% from 94.3% a year earlier, though this represented a slight slip from 95.8% at the end of December.
Intu said it signed 43 new long-term leases for GBP7.0 million in annual rent in the first months of the year, which, in aggregate is 10% above previous passing rent.
"Encouragingly we have seen little impact on customer flow into our shopping centres or tenant interest for space which remains very positive despite financial markets being volatile ahead of the EU referendum vote on 23 June 2016," said Intu Chief Executive David Fischel.
"Global investors continue to look actively at prime regional shopping centres in the UK, focussing on the quality income streams provided by this asset class," he added.
In the period, the shopping centre owner said Danish homeware retailer Sostrene Grene opened its first UK store at Intu's Victoria Centre in Nottingham, whilst fashion retailer New Look Men continued its store roll out at Intu's Stoke-on-Trent Potteries property.
Intu noted department store retailer BHS and suits retailer Austin Reed, which together hold twelve units, entered administration during the period, but said these administrations amount to 1.0% of its rent roll and said it has plans for many of these stores should they be vacated.
Intu added clothing retailer Next PLC agreed an enlarged unit at the Essex Lakeside property, increasing its space by 10,000 square feet to 71,000 square feet, and Hollywood Bowl and Paradise Island Adventure Gold took leases at Intu's 42,000 square feet development in Derby.
Intu settled 38 rent reviews in the period for new rents totalling GBP14.0 million, an average uplift of 9.0% on the previous rents, it said.
The shopping centre owner added its UK development pipeline is on track, having opened 11 new restaurants at its Gateshead Metrocentre in an extension of the Qube leisure area. Intu said this GBP17.0 million redevelopment has brought restaurant brands such as Five Guys and TGI Fridays to the centre and delivered a stabilised initial yield on cost of more than 8.0%.
Intu completed the demolition of the Charter Place precinct adjacent to its Watford shopping centre, it said, and has commenced the fixed cost building contract for the GBP180.0 million extension. Almost 60% of the new space is under offer, Intu added.
In Spain, the shopping centre owner said it has continued to perform well, with year-on-year footfall up 2.0% and year-on-year retailer sales up 4.0%.
Shares in Intu were down 0.9% at 296.00 pence on Wednesday morning.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
INTU.L