26th Feb 2016 10:27
LONDON (Alliance News) - Intu Properties PLC returned to like-for-like rental income growth in 2015 following an improved performance in the second half, the shopping centre owner said on Friday, though its pretax profit dipped due to lower total valuation gains made on its portfolio.
The FTSE 100-listed group said its like-for-like rental income grew 1.8% in the year to the end of December, compared to a 3.2% decline a year earlier. The group expects this to continue in 2016, guiding to like-for-like rental growth of 2-3%.
Net rental income rose to GBP381.8 million from GBP362.6 million, helping total revenue for the group rise to GBP571.6 million from GBP536.4 million. The group secured 261 new leases over the course of the year, adding GBP46.0 million in new rent to its books, up from 210 leases and GBP34.0 million the year earlier.
Pretax profit, however, declined to GBP513.0 million, down from a GBP593.7 million profit a year earlier, as a significant decline in the valuation gain it made on its portfolio offset much lower financing costs for the business.
The group's net asset value per share was higher for the year, up to 404.00 pence from 379.00p, with the market value of its investment properties now at GBP9.60 billion, up from GBP8.96 billion at the end of 2014.
Intu, however, was confident on its outlook for the coming year and said it will spend GBP578.0 million on projects over the next three years in the UK, including an extension to the Intu Watford centre and the start of work on Intu Costa del Sol, its Spanish project. It added another GBP1.1 billion of investment opportunities can be seen for the next decade.
Occupancy increased to 96% at the close of the year, up from 95% at the end of 2015, and retailer sales rose 2.0% across the portfolio, helped by robust footfall levels being maintained. Footfall levels rose 0.3% in the year, ahead of the 0.1% growth seen in 2014.
Intu said it will pay a final dividend of 9.1 pence per share, meaning its total dividend remains flat at 13.7p.
"As economic recovery spreads out from London and the south east to the regions, consumer confidence is positive, driving improved retailer demand for space in our centres at a time when new supply of quality retail space is very limited. Investor interest for prime regional shopping centres remains keen," said David Fishel, Intu's chief executive.
"These factors provide a favourable background for our development programme as we look to introduce the next level of leisure concepts," he added.
Intu shares were up 1.8% to 286.8 pence on Friday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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