Half Yearly Report

1 AUGUST 2013

INTU PROPERTIES PLC

INTERIM REPORT FOR THE HALF YEAR ENDED 30 JUNE 2013

David Fischel, Chief Executive of Intu Properties plc, commented:

"We are delighted with the impact of rebranding the company and our regional shopping centres as Intu and the business opportunities the change is providing. Momentum across the whole company is significant with the important acquisitions in the period of Midsummer Place, Milton Keynes and Charter Place, Watford.

We have strengthened our financial position with debt refinancings and equity issuance and advanced a number of investment projects which form part of our £1 billion pipeline. Today we report steady occupancy and letting progress as signs now emerge of economic recovery in the UK".

Enquiries:

A presentation to analysts and investors will take place at UBS, Room 29, 1 Finsbury Avenue, London EC2M 2PP at 09.30BST on 1 August 2013. The presentation will also be available to international analysts and investors through a live audio call and webcast. The presentation and this announcement are available for download from our website intugroup.co.uk.

NOTES TO EDITORS

FIRST HALF 2013 HIGHLIGHTS

Operational highlights

Building momentum - reinforcing our destinations:

·; Investment projects underway or close to commencement at intu Eldon Square, intu Victoria Centre, intu Lakeside, intu Metrocentre and intu Potteries, in aggregate £90 million; part of our £1 billion pipeline across the portfolio

·; Strategic acquisitions in period - Midsummer Place, Milton Keynes, and Charter Place, Watford

Created nationwide consumer-facing brand, intu, offering an engaging and digitally-connected experience:

·; Single brand for company and shopping centres bringing operating efficiencies and nationwide business opportunities

·; Previously out-sourced facilities management and customer-facing teams brought in-house

·; Installed fully-owned fibre-optic infrastructure and launched high quality free Wi-Fi in four centres to date; intu Trafford Centre is UK's first 4G-enabled shopping centre

·; UK's first multi-channel shopping centre, intu.co.uk, in live testing phase before full consumer launch in autumn 2013

Improved financial flexibility and strengthened balance sheet:

·; Long term debt issuance of £1.15 billion, refinancing one-third of Group's debt, including 10 and 15 year bond issues

·; Equity placing of £280 million, with shareholders on the South African register for the first time able to participate in Rand

·; Net assets increased from £3.0 billion to £3.4 billion

·; Debt to assets ratio 48.6 per cent (31 December 2012 49.5 per cent)

·; Cash and available facilities £250 million at 30 June; augmented in July by raising £125 million bank loan secured on intu Midsummer Place

·; Property valuations increased 1.0 per cent, comparing favourably with benchmark index which fell 1.1 per cent

·; NAV per share (diluted, adjusted) of 377 pence with £70 million valuation surplus offset by derivative liability crystallised on refinancing and impact of equity placing

Steady occupancy and letting progress:

·; Occupancy remains firm at the 95 per cent level reported in the first quarter IMS (31 December 2012 - 96 per cent)

·; Like-for-like net rental income down 2.9 per cent, with rental increases offset by tenant failures

·; 95 new long term leases signed, £23 million annual rent, in line with valuation assumptions and 3 per cent above previous passing rent (like-for-like units)

·; Footfall down 2 per cent, significantly out-performing Experian benchmark down 4 per cent

·; Estimated retailer sales up 1 per cent, in line with BRC benchmark

Financial highlights (1)

 (1) Please refer to glossary for definition of terms

OPERATING AND FINANCIAL REVIEW

OPERATING REVIEW

INTRODUCTION

We have been very focused in 2013 on pursuing our strategic priorities for the year which are:

·; to optimise the performance of our existing assets, prioritising medium-term value creation

·; to continue to invest in the business, including pursuing our pipeline of development opportunities

·; to increase our financing flexibility to advance the business

·; to take forward our new brand, intu, and transformed digital proposition

We have made significant progress on all the above in the first half of 2013 and have a strong momentum of change across the business, as evidenced by:

·; major initiatives across our portfolio (see Building Momentum - Reinforcing Our Destinations below)

·; creation of nationwide consumer-facing brand, intu, offering an engaging and digitally-connected experience (see UK Retail Property Market below)

·; significant improvement in our financial flexibility by the establishment of a new debt funding platform and a £280 million equity issuance augmented by a further £35 million from 2012 final scrip dividend take up (see Financial Review below)

·; the increase in the aggregate market value of our shopping centres through letting activity and active management projects (see Stable Occupancy and Letting Progress below)

We are delighted with the immediate impact of our bold decision to rebrand the company and centres as intu. The initiative is driving significant cultural change throughout the organisation and customers are already experiencing our refreshing new style in the centres (see Intu is leading the change below).

The retail environment in the UK has continued to be testing, with earnings affected by failures in the last eighteen months of tenants representing annual rent of £35 million (2013 to date - £13 million). However favourable letting activity, particularly at our larger centres, has limited the impact to a 2.9 per cent reduction in like-for-like net rental income which was the main factor in the reduction in underlying earnings per share from 8.1 pence to 7.4 pence in the first half.

We have taken steps in the period which have strengthened the balance sheet. The principal factors in the 15 pence reduction in diluted adjusted net assets per share to 377 pence are the crystallisation of the negative mark to market position on interest rate swaps as part of the debt refinancing (9 pence) and the dilution on issue of new equity (7 pence). These offset the positive impact of the £70 million property valuation uplift.

The scale of our business and our national coverage was augmented in the period by the £250 million acquisition of Midsummer Place, Milton Keynes, which gives us an important investment in a major and thriving regional retail destination.

OUTLOOK

We are encouraged by the recent signs of improvement in the UK economy which should in due course lead to increased retailer demand for well-configured space in our high quality shopping centres.

The new debt funding platform and additional equity position Intu to take advantage of opportunities for growth.

We remain confident that our management approach of focusing on tenant mix strategy, capital expenditure and rebranding will drive medium-term value creation, particularly as market conditions improve.

Chart 1 shows Intu asset valuations. To view chart 1, please paste the following URL into the address bar of your browser http://www.rns-pdf.londonstockexchange.com/rns/6353K_-2013-7-31.pdf.

UK RETAIL PROPERTY MARKET

UK retail property occupational market

GDP grew marginally, by 0.3 per cent, in the first quarter and grew more strongly in the second quarter at 0.6 per cent. Like-for-like retail sales as measured by the BRC non-food index have increased marginally for twelve successive months showing, in aggregate, 1 per cent growth for the year to 30 June 2013. Consumer confidence indices have recently picked up slightly, albeit from very low levels.

At the same time technology is changing long-standing shopping habits and enabling new levels of interaction between consumers and brands. Many retailers are focusing on the effectiveness of their network of stores in driving traffic to their brand, with multi-channel strategies polarising occupier interest onto key locations such as those owned by Intu.

Intu is leading the change - created a nationwide consumer-facing brand offering an engaging and digitally-connected experience

As the leading specialist operator of prime UK shopping centres, we recognised the opportunity to create a national identity and to integrate physical and online retail experiences. Since the January announcement of the "intu" brand and of a digitally-enabled environment we have:

·; rebranded the company and each of our directly-managed shopping centres with our refreshing new style. The scope of the rebranding ranges from physical signage to new uniforms to World Class Service training for 1,800 employees

·; in-sourced facilities management services across our shopping centres, bringing the local teams into alignment with our brand aspirations and values and allowing us to take control over the customer experience

·; installed fibre optic infrastructure and launched free Wi-Fi in four centres, with direct ownership of the technology and the subsequent data. The other centres will follow each month until spring 2014. Intu Trafford Centre is now the UK's most digitally connected shopping centre, the first to be 4G-enabled

·; developed the UK's first multi-channel shopping centre, intu.co.uk, which is now undergoing testing in a live environment with a full consumer launch in the autumn. By launch we expect the site to have around 80 retailers and over 1,000 brands available for home delivery or click and collect in store or in our centres. For the year to June 2013 nine million unique devices accessed our websites, of which around half were mobile, providing immediate traffic to our new single domain

The purpose of these initiatives is to increase footfall, dwell time and spend in our centres and reinforce the success of our tenants. We are already seeing benefits of our approach:

·; reinforcing with retailers the scale of Intu's activities and the importance of their stores in intu centres

·; launch of nationwide marketing partnerships with the potential to generate ancillary income

·; increased national press coverage of Intu Properties plc and Intu centres

·; operational efficiencies, particularly for marketing initiatives and materials

·; motivated and energised centre teams aiming to deliver a higher quality of service

·; excellent customer response to the rebranding and high quality Wi-Fi

·; retailer interest in Wi-Fi with potential to generate additional income

·; initial interest by online-only retailers in physical stores in our malls to maximise their own multi-channel opportunities

·; identification of opportunities for infrastructure efficiencies within centres such as CCTV, facilities management communications and building management systems

UK retail property investment market

Transaction activity in the shopping centre investment market in the first half of the year has indicated continuing strong interest in the most prime assets which has contributed to slightly tightening yields. Signs have also begun to appear of broader interest in the sector with the limited supply of prime assets stimulating a revival of demand for the better secondary assets.

Debt markets have strengthened significantly in the last twelve months. From very limited availability a year ago, the current healthy range of funding sources and variety of providers of debt to the sector should underpin asset values.

Intu property valuation performance

The aggregate like-for-like market value of our investment property increased by 1.0 per cent in the first half of the year, a significant out-performance of the benchmark IPD monthly index which we have consistently out-performed from the IPD peak at June 2007 to date. The prime and resilient nature of our assets has been reinforced by our robust asset management style and creative active management at each centre. As a result both the change in valuation yields and the underlying rental levels have out-performed the benchmark in the period. We have seen pockets of ERV growth in our largest centres, although some weaker areas of smaller centres have performed closer to the benchmark.

The weighted average nominal equivalent yield at 30 June 2013 was 5.85 per cent, a reduction of 9 basis points in the first half. Based on the gross portfolio value, the net initial yield "topped up" for the expiry of rent free periods was 5.10 per cent.

* IPD monthly index, retail

There has been some variation of performance between assets. Each of the five super-regional centres increased in value and in general the larger city centre shopping centres were more resilient than the smaller scale centres. Notable changes include:

·; intu Trafford Centre (+£47 million, 2.6 per cent) has benefited from national evidence of stronger yields for the most prime assets as well as significant progress on renewing leases expiring in 2013

·; intu Lakeside (+£21 million, 2.0 per cent) has benefited from an earnings-enhancing food court refurbishment

·; intu Eldon Square (-£4 million, 1.5 per cent) where committed refurbishment expenditure has not yet been reflected in the valuation ERV

·; St David's, Cardiff (+£9 million, 3.9 per cent) has benefited from continued income growth in the 2009 extension

·; intu Bromley (-£5 million, 2.8 per cent) has not yet benefited from potential valuation yield or ERV increases from committed refurbishment expenditure

·; intu Potteries (-£4 million, 2.3 per cent) has been affected by reduced passing rent due to vacancy and rent free periods as we work through the 2013 lease expiries (see Expiries below)

·; Manchester Arndale (+£8 million, 2.1 per cent) has benefited from national evidence of stronger yields

STEADY OCCUPANCY AND LETTING PROGRESS

Occupancy has been maintained at a high level despite failures of tenants representing annual rent of £22 million in 2012 and £13 million to date in 2013. These administrations have however affected 2013 earnings. Concentrations of lease expiries, particularly at Cribbs Causeway and intu Potteries, are also impacting earnings as we remodel the tenant mix in these centres but we are making good progress on renewals. We have been encouraged by pockets of ERV growth, particularly at our larger centres. With £23 million of new leases signed and some £50 million of shopfit investment commitments by retailers, our assets have continued to demonstrate their key role in dynamic retailers' portfolio requirements. Key operating metrics include:

·; Occupancy: Occupancy remains firm at the 95 per cent level reported at the end of the first quarter (31 December 2012 - 96 per cent) which compares favourably to overall UK retail vacancy as measured by Local Data Company at 14 per cent. The small reduction since the year end is the result of the expiry of seasonal lettings and tenant administrations. In aggregate units amounting to 1 per cent of rent are currently being traded by administrators and are treated as occupied within the 95 per cent.

We continue to take a firm line on relettings with a view to maintaining the quality of our centres. In particular we are repositioning aspects of the tenant mix at intu Watford and intu Bromley which has resulted in slightly lower occupancy levels at those centres.

Short-term leases, those for less than five years, are now primarily entered into for flexibility in the run up to development projects or for trials of new concept stores. As a result, passing rent attributable to units occupied under short-term leases has continued to reduce and now amounts to 1 per cent of group total.

·; Net rental income: Aggregate net rental income is broadly unchanged year on year with income from acquisitions, primarily Midsummer Place, Milton Keynes, in March 2013, offset by a like-for-like net reduction.

Like-for-like net rental income was 2.9 per cent lower in the first half of 2013 than the same period of 2012. While gross rent on like-for-like assets was £3 million higher due to increases on letting activity, this was more than offset by the £5 million rent foregone and direct costs associated with tenant failures.

Chart 2 shows change in like-for-like net rental income. To view chart 2, please paste the following URL into the address bar of your browser http://www.rns-pdf.londonstockexchange.com/rns/6353K_-2013-7-31.pdf.

·; Lettings: We have agreed 95 new long term leases in the first half representing £23 million of new annual rent, 3 per cent above previous passing rent (like-for-like units) and, excluding a significant pre-development signing at intu Watford, in line with valuation assumptions for those units. These include:

o £6 million of new lettings and renewals at Cribbs Causeway, Bristol, representing 22 of the 35 units and two thirds of the income expiring in 2013. This includes a new flagship Topshop/Topman store which opened in May

o first lettings for the intu portfolio for The White Company at St David's, Cardiff, and Blott at intu Lakeside, Manchester Arndale and St David's, Cardiff

o further broadening of the catering offer with Circle 360 Champagne & Cocktails at intu Lakeside, Ed's Diner at intu Metrocentre and intu Chapelfield, Nando's at intu Braehead and Mount Fuji at St David's, Cardiff

o a major new flagship store, key to repositioning the retailer mix at intu Watford ahead of its expansion with the Charter Place redevelopment (see below)

·; Expiries: Weighted average unexpired lease term has reduced slightly to 7.5 years (31 December 2012 - 7.8 years).

We have completed the 2011/12 programme at Metrocentre and are carefully managing the 2013 concentrations of expiries at Cribbs Causeway and intu Potteries. We have now secured leases with existing or new retailers for well over half of the 2013 expiries in each case.

Whilst these concentrations involve risk and can create some short-term earnings impact, they also provide the opportunity for a repositioning of the tenant mix for creating potential medium-term value enhancement. Examples include the introduction of Schuh and Swarovski to intu Potteries.

Chart 3 shows lease expiry profile. To view chart 3, please paste the following URL into the address bar of your browser http://www.rns-pdf.londonstockexchange.com/rns/6353K_-2013-7-31.pdf.

·; Footfall: Footfall in our centres in the first half of 2013 has been 2 per cent lower than the same period of 2012. This represents a significant out-performance of Experian's measure of UK national retail footfall which declined 4 per cent.

·; Retailer sales: Estimated retailer sales in centres increased by 1 per cent in the year to 30 June 2013, in line with the benchmark BRC non-food like-for-like aggregate growth. The estimated occupancy cost ratio (annual rent to retailer turnover) is 12.3 per cent excluding anchor stores, compared to 12.4 per cent for the year ended 31 December 2012 and 13.0 per cent for the year ended 30 June 2012.

BUILDING MOMENTUM - REINFORCING OUR DESTINATIONS

We are investing across our estate to reinforce the destination status of each centre within its catchment, in particular looking to provide the right environment to support an extension of trading hours wherever possible. As well as generating income from incremental space, the projects are designed to provide more reasons for shoppers to visit, to come from further afield and stay longer in our centres.

Dwell time has a strong relationship with retail spend. This relationship is stronger in visitors who purchase some form of catering, a particular driver of evening trading. Our research indicates that customers who eat or drink at a centre stay around two thirds longer and spend around two thirds more than those who solely shop in the centre.

The majority of projects we are planning feature an increased amount and range of catering and leisure options. Catering and leisure operators now account for 11 per cent of the aggregate rent roll, 17 per cent of units across the portfolio and, we estimate, generate turnover of around £330 million. As an example in the period we have seen the successful opening of the Sealife Aquarium next to the Legoland Discovery Centre in Barton Square.

The table below sets out a summary of the project pipeline.

We would expect our major extensions, which constitute the bulk of the expenditure, to generate an initial stabilised yield on cost in the range of 7 to 8.5 per cent.

In the case of expansionary projects creating additional lettable space for which direct incremental rent can be identified, we would expect to generate an initial stabilised yield on cost in the range of 6 to 10 per cent.

Other projects are to a greater or lesser extent focused on reconfiguration or refurbishment of existing space in order to generate enhanced tenant mix and rental tone. The motivation of these initiatives is the wider improvement of the centre and its attractions creating significant medium term rental upside. In these cases returns would be generated in future rent reviews and new lettings. We would assess project return in the context of an internal rate of return, based on the overall impact on centre performance over a period usually around five years.

1 Represents net additional floor space of retail, catering and leisure

2 Timing subject to change due to a number of internal and external factors

3 Intu's share of the total project cost is £9 million of which £2 million has already been spent

4 The majority of smaller committed and pipeline projects do not involve the creation of additional floor space

5 Size excludes arena and hotel

Significant progress in the period includes:

Intu Eldon Square:we are half way through major refurbishment works to the original centre and have consolidated temporary lettings into the Sidgate area ahead of our planned 20 restaurant, two level dining quarter.

Intu Metrocentre: we have begun work to create the new Platinum Mall which has already resulted in new lettings to Mamas & Papas, Tessuti and Phase Eight.

Intu Victoria Centre:we plan to start in early 2014 major refurbishment work including new entrances, reconfigured public areas and new lighting, ceilings and floors. As a result, we are in negotiation with some exciting new retailers who had been delaying their plans for Nottingham while uncertainty remained over retail development in the city. We have also submitted a planning application for a cluster of 12 new restaurants incorporating an existing piazza area. This is a precursor to major investment in intu Broadmarsh and the extension to intu Victoria Centre.

Intu Lakeside:we are about to embark on the refurbishment and extension of the food court which will increase direct rent and raise the quality of the catering offer.

Intu Potteries:the pre-letting of our development of a cinema and five restaurants is in solicitors' hands and we expect to start construction later this year.

Intu Bromley:having secured planning consent, we now have leases in solicitors' hands for the five new restaurants in Queen's Gardens. We expect to start construction in the Autumn and will at the same time undertake some high impact, low outlay refurbishment works across the centre.

Intu Watford:we have acquired the adjoining Charter Place which we intend to replace with a cinema, restaurants and large format retail units to create a combined 1.4 million sq ft shopping and leisure destination. We have been encouraged by the level of interest from retailers and operators and plan to start on site with pre-lets secured during 2014.

Intu Midsummer Place: in March we acquired Midsummer Place, Milton Keynes, for £250 million. The centre adjoins the town's original "thecentre:mk" and consumers shop the two assets as a single major regional retail destination. Located in a planned "new town" established in the 1960s with an affluent and growing catchment, it is particularly accessible for a UK city centre shopping centre. We are in discussions with retailers regarding reconfiguration of aspects of the tenant mix and are planning other active management projects. We are confident of generating significant rental income growth in a three to five year timeframe.

International: our effective 9 per cent interest in Equity One, a US retail REIT, increased in value in the first half by £23 million to £170 million. Our associate company in India, Prozone, has continued to make progress towards its next phase of mixed-use developments. In the period we established a joint venture in Spain (up to €5 million investment) with Eurofund, a local partner with a track record of successful retail development, for pre-development activity at two sites, in Valencia and Vigo, with potential for regional shopping centres. We are also working with Eurofund on the masterplan for the site of a potential major regional shopping centre in the province of Malaga over which Intu acquired a purchase option in 2012.

Dividends

The Directors have resolved to pay an interim dividend of 5.0 pence per share on 19 November 2013 to shareholders on the register on 18 October 2013.

Following the approval by shareholders at the Annual General Meeting on 29 April 2012 of the scrip dividend scheme, the Board may choose to offer a scrip dividend for any individual dividend. Scrip dividend take up of the 2012 dividends averaged 39 per cent resulting in £45 million of cash being retained by the Group.

Should the Directors decide to offer a scrip alternative to the 2013 interim dividend, shareholders will be advised no later than Friday 27 September 2013. The Board's decision will be dependent on the stock market conditions, in particular the level of the share price relative to the net asset value per share, up to that date.

Details of the apportionment between the PID and non-PID elements per share will be confirmed at that time as, in the event of a scrip alternative being offered, the cash dividend may be wholly PID and the scrip alternative may be non-PID.

FINANCIAL REVIEW

In 2013 the Group's financial management has focused on creating the financing flexibility to advance the business. As announced in February this year the Group established a new debt funding platform, raising £1,150 million of bond and bank debt. In March, the Group issued 86 million new ordinary shares at 325 pence per share raising net proceeds after costs of £273 million to fund the acquisition of Midsummer Place. Subsequently in July, £125 million of bank debt was raised, secured on the property.

Key points of note

·; The tough market conditions affected the financial results for the period (see "Results For the Period Ended 30 June 2013" below)

o Underlying earnings of £68 million, down 2 per cent on the 2012 comparable period, giving earnings per share of 7.4 pence

o NAV per share at 377 pence; total return for the period -1 per cent

·; Improved financial flexibility (see "Financial position at 30 June 2013" below)

o Debt to assets ratio at 48.6 per cent, would reduce to around 44 per cent were the convertible bonds to convert to equity: target range 40-50 per cent

o Interest cover ratio at 1.63x: target level 1.60x

RESULTS FOR THE PERIOD ENDED 30 JUNE 2013

Although there are indications that the UK economy may be improving the general retail environment continues to be challenging as evidenced by further tenant administrations. It is therefore encouraging that underlying earnings per share only reduced slightly in the period and that property valuations were in aggregate positive, largely due to the performance from the Group's super-regional centres.

Income statement

The Group recorded a profit for the period of £200 million, a significant improvement on the profit of £78 million reported for the period ended 30 June 2012. At an underlying level, excluding valuation and exceptional items, earnings were marginally lower at £68 million (2012 - £70 million).

The major factors in the increase in profit to £200 million are valuation items. The major components in the movement from 2012 include:

·; a favourable movement of £184 million in the Group's provision for fair value of financial instruments (2012 - £29 million favourable). The financial instruments are largely interest rate swaps used to hedge the interest rate payable on the majority of the Group's floating rate borrowings

·; an increase in the revaluation gain on the Group's properties to £70 million from a gain of less than £1 million in the comparable period in 2012

·; offsetting these factors were higher exceptional finance costs, totalling £112 million, mainly arising from terminating interest rate swaps. This was required as part of refinancing a significant proportion of the Group's borrowings and creating the new debt funding platform, further details of which are provided in the "Financial position at 30 June 2013" section below

Underlying earnings, which excludes valuation and exceptional items, were marginally lower in 2013 at £68 million as shown in chart 4 and as set out in the Underlying Profit Statement. To view chart 4, please paste the following URL into the address bar of your browser http://www.rns-pdf.londonstockexchange.com/rns/6353K_-2013-7-31.pdf. Taking into account additional shares issued as part of the Midsummer Place acquisition, underlying earnings per share reduced by 9 per cent to 7.4 pence.

The principal components of the change in underlying earnings are as follows:

·; while net rental income was steady overall due to the impact of the acquisitions, in particular that of Midsummer Place in March 2013, on a like-for-like basis it reduced by 2.9 per cent largely due to the impact of tenant administrations. This has been partially offset by the favourable impact of new lettings and rent reviews at intu Lakeside, intu Trafford Centre, Manchester Arndale and intu Braehead (see below)

·; as illustrated in the table below the Group's net rental margin has remained in line with 2012 with higher void costs being offset by tight control over property operating costs.

·; underlying net finance costs, which exclude exceptional items, reduced due to the favourable impact of increased access to lower rates currently available

·; ongoing administration expenses increased to £14 million (2012 - £13 million), largely due to higher employee related costs as the Group builds its capabilities

Balance sheet

The Group's net assets attributable to equity shareholders have increased by £0.4 billion from 31 December 2012 to £3.4 billion at 30 June 2013. The increase is largely due to the equity placing in March 2013 to fund the Midsummer Place acquisition and the retained earnings for the period.

As detailed in the table below, net assets (diluted, adjusted) have increased by £247 million from 31 December 2012.

The investments of £211 million comprise the Group's interests in the US and India. The investment in the US comprises the 11.4 million shares in a joint venture with Equity One, a US REIT. Based on the Equity One share price of $22.63 at 30 June 2013, the Group's investment amounts to £170 million. The remaining amount represents the Group's interests in India, largely comprising a 32.4 per cent interest in its associate company, Prozone, a shopping centre developer.

The £185 million reduction in Other assets and liabilities is largely due to the reduction in the provision for the fair value of derivative financial instruments.

Adjusted net assets per share

As illustrated in chart 5, diluted adjusted net assets per share were 377 pence at 30 June 2013, a decrease of 15 pence from 31 December 2012. To view chart 5, please paste the following URL into the address bar of your browser http://www.rns-pdf.londonstockexchange.com/rns/6353K_-2013-7-31.pdf.

The most significant factor in the reduction relates to the closure of interest rate swaps that were required as part of refinancing a significant element of the Group's borrowings and creation of the new funding platform, further details of which are given below. The 2012 final dividend of 10 pence per share was paid in June 2013.

Offsetting these movements were the positive impacts of the underlying earnings and the property valuation gain for the period, both of which contributed 7 pence to the net assets per share.

Cash flow

The cash flow summary below analyses the decrease in the Group's cash balance in the period. This can be attributed to the exceptional finance costs.

The £248.6 million acquisition of business relates to Midsummer Place which was funded by an equity raise.

There were no individually large capital expenditure projects in the period with the largest expenditure being £2 million at intu Lakeside.

The property sale proceeds of £15.6 million are in respect of the disposal of a long leasehold interest in a property adjacent to St David's, Cardiff to a major new tenant.

The increase in dividends paid in the current year is a timing difference with the 2011 final dividend having been paid in July 2012 whereas the 2012 final dividend was paid in June 2013.

The table below illustrates that recurring cash flow covers the 2013 interim dividend of 5.0 pence per share that will be paid for the period.

The actual cash dividend outlay may be less than the 5 pence per share dividend declared if the Board decides to offer a scrip dividend alternative with the 2013 interim dividend.

Capital commitments

The Group has an aggregate commitment to capital projects of £49 million at 30 June 2013. In addition to the committed expenditure, the Group has an identified project pipeline, excluding major extensions, of some £200 million covering the period up to the end of 2017. It is anticipated that approximately £40 million relating to capital projects, including those projects currently accrued on the Group's balance sheet, will be funded in the balance of 2013.

Financial position at 30 June 2013

At 30 June 2013, the Group had net external debt of £3,593 million, an increase of £89 million over the 31 December 2012 balance of £3,504 million. In addition to cash balances of £140 million the Group had £110 million undrawn on the revolving credit facility at 30 June 2013, giving total cash and available facilities of £250 million.

On the 16 July 2013 the Group arranged a £125 million facility secured on intu Midsummer Place. The facility is for a term of three years and three months with the possibility of being extended up to a further two years subject to both parties agreeing.

As announced in February this year, the Group has established a new debt funding platform ("Secured Group Structure") by contributing £2.3 billion of assets into a flexible, ring-fenced security pool and raising £1.15 billion of bond and bank debt secured on it. The inaugural bond issue was highly successful with strong demand supporting upsizing to two tranches of 'A' rated debt totalling £800 million with the balance of £350 million provided by a five year bank loan. The transaction represents the first sterling multi-debt sourced real estate structured financing since 2007. Key benefits of the structure are:

·; access to the bond markets and a range of other instruments diversifies our sources of funding

·; blended cost of 4.4 per cent, in line with previous funding cost of debt secured on the four assets, whilst extending the weighted maturity on these assets from 2 years to 10 years

·; tranches of £450 million and £350 million maturing in 2023 and 2028 respectively significantly extend our overall debt maturity profile, from 6 years to 8 years

·; in refinancing a third of the Group's debt, we have significantly de-risked the 2015-2017 maturities and demonstrated that our prime assets can be financed at around 50 per cent loan to value at competitive margins

The structure has a tiered operating covenant regime giving the Group a significant degree of flexibility when the covenants are below certain levels. In higher tiers the level of flexibility is reduced. The Group retains operating control below loan to value of 72.5 per cent and interest cover above 1.4x. No financial covenant default occurs unless the loan to value exceeds 80 per cent or the interest cover falls below 1.25x. The current loan to value is 49 per cent and interest cover is 2.26x.

Group debt ratios were as follows:

Net debt repayments, excluding drawings of the Group's Revolving Credit Facility, totalled £235 million. This included a net repayment of £155 million as part of the creation of the new debt funding platform. In addition £27 million of bonds matured in the period, with the majority of the remaining repayments representing ongoing principal amortisation payments.

Following the refinancing and these repayments the Group's debt maturity profile is illustrated in chart 6: To view chart 6, please paste the following URL into the address bar of your browserhttp://www.rns-pdf.londonstockexchange.com/rns/6353K_-2013-7-31.pdf.

Hedging 

The majority of the Group's debt is floating rate. The Group uses interest rate swaps to fix short- and medium-term interest obligations, reducing cash flow volatility caused by changes in interest rates. The Group is currently effectively fully hedged. 

The table below sets out the nominal amount and average rate of hedging, excluding lenders' margins, in place under current and forward starting swap contracts:

Covenants

Full details of the loan financial covenants are included in the Other Information section of this report. The Group is in compliance with all of its corporate and asset-specific loan covenants.

Tax policy

To continue to behave as a good corporate citizen we believe that paying and collecting taxes is an important part of our role as a business and our wider contribution to society.

Intu is committed to acting with integrity and transparency in all tax matters, and we have an open, up-front and no-surprises policy in dealings with HMRC. We are in regular discussions with HMRC and they are kept informed and are asked for advance clearance in relation to complex areas and transactions undertaken by the Group.

The REIT legislation was designed to allow people to invest in property without actually buying bricks and mortar and hence encourage inward investment into the UK. To become a REIT we paid a REIT entry charge of £199 million to HMRC. As a REIT we are exempt from paying UK corporation tax on most of our profits but we have to meet other requirements including paying 90% of our profits to shareholders as dividends which are then subject to tax. The tax is still paid but the effect is that it is moved from the company level to the investor level as if the investors owned the property directly.

The special REIT regime only applies to our UK property rental business. In addition, we pay corporation tax on overseas and non-property rental earnings, business rates, employer's national insurance and stamp taxes; and collect VAT from our tenants, PAYE and national insurance from our employees and dividend withholding tax from our shareholders - and pay these amounts to HMRC in full and on time. In 2012, taxes paid by Intu totalled £28 million and taxes collected totalled £84 million. In addition, business rates, principally paid by tenants, in respect of the Group's properties amounted to around £250 million in 2012.

Tax credit for the period

The tax credit in the period of £4.9 million comprises a current tax expense on the income from US investments of £0.3 million and a deferred tax credit largely on the revaluation of interest rate swaps of £5.2 million.

KEY RISKS AND UNCERTAINTIES

The key risks and uncertainties facing the Group are as set out in the table below:

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors are responsible for preparing the interim report and condensed set of financial statements, in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:

·; the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the European Union; and

·; the interim report includes a fair review of the information required by Sections DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

The operating and financial review refers to important events which have taken place in the period.

The principal risks and uncertainties facing the business are referred to in the operating and financial review.

Related party transactions are set out in note 24 of the condensed set of financial statements.

A list of current Directors is maintained on the Intu Properties plc website: intugroup.co.uk.

On behalf of the Board

David Fischel

Chief Executive

Matthew Roberts

Finance Director

1 August 2013

INDEPENDENT REVIEW REPORT TO INTU PROPERTIES PLC

IntroductionWe have been engaged by the company to review the condensed set of financial statementsin the interim report for the half year ended 30 June 2013, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated statement of cash flows and related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.Directors' responsibilitiesThe interim report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.Our responsibilityOur responsibility is to express to the company a conclusion on the condensed set of financial statements in the interim report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.Scope of reviewWe conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.ConclusionBased on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim report for the half year ended 30 June 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

PricewaterhouseCoopers LLPChartered AccountantsLondon

1 August 2013

CONSOLIDATED INCOME STATEMENT (unaudited)

For the six months ended 30 June 2013

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

For the six months ended 30 June 2013

CONSOLIDATED BALANCE SHEET (unaudited)

As at 30 June 2013

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

For the six months ended 30 June 2013