3rd Nov 2014 08:49
LONDON (Alliance News) - Intu Properties PLC Monday said it is seeing continued improved demand for space from retailers, its key operating metrics are stable, and it also proposed a further GBP350 million bond issue as part of a financing operation for two shopping centres.
In a statement, the property company said it has agreed 71 new long term leases for GBP13 million in new annual rent, 5% above previous passing rent, in the months since July 1. It said footfall in its properties in the year to date is up 1%, although occupancy has fallen marginally since the end of June to 95%.
"We are pleased to see continued improvement in retailer demand for space, particularly evident in centres where we are undertaking investment and development projects. The benefits of last year's rebranding as intu have been enhanced by further customer service and digital initiatives in the period," Chief Executive David Fischel said.
Intu said its GBP1.2 billion development programme is on track, with a food court completed at intu Lakeside, and a mall upgrade completed at intu Eldon Square. It is also adding a cinema and restaurants at intu Potteries and restaurants and reconfigurations at intu Victoria Centre.
The company has been refinancing, replacing GBP453 million of bank facilities with GBP763 million of new facilities.
Separately Monday, the company said it is proposing a new GBP350 million bond issue following the proposed transfer of its intu Derby and intu Chapelfield shopping centres into the secured group structure funding platform. It said the proceeds will be used to repay the existing debt facilities secured on the retail sites.
The secured group structure platform was established in March 2013 as a central source of funding for Intu. At that time, four centres with a value of GBP2.30 billion - intu Lakeside, intu Watford, intu Victoria Centre and intu Braehead - were contributed into the structure and GBP1.15 billion was raised in the form of secured bonds and term loans.
As of October 13 this year, the four existing assets in the funding scheme were valued at GBP2.47 billion, comprising intu Lakeside at GBP1.25 billion, intu Braehead at GBP580 million, intu Watford at GBP335 million and intu Victoria Centre at GBP304 million. On the same date, the two proposed assets to be transferred into the scheme were valued at GBP679 million, comprising intu Derby at GBP419 million and intu Chapelfield at GBP260 million.
When completed, the six assets held in the scheme will have a combined value of GBP3.15 billion and, when the new GBP350 million bond is issued, will have total outstanding debt of GBP1.50 billion, representing an loan-to-value ratio of about 48%.
Intu Properties shares were down 0.1% at 340.20 pence early Monday.
By Steve McGrath; [email protected]; @stevemcgrath1
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