Braehead shopping centre owner Intu has warned that rising retailer failures and tenants delaying decisions is expected to see its rental income fall more than expected this year.
The group which owns Manchester’s Trafford Centre and Gateshead’s Metrocentre as well as the Renfrewshire complex, said a rise in the number of company voluntary arrangements – where struggling firms renegotiate debts with creditors – means it has revised its approach to forecasting future rental income.
It now expects like-for-like net rental income for 2019 will be down by 4-6%.
In a first quarter trading update, new chief executive Matthew Roberts said its operational performance in the quarter had been stable, signing 53 long-term leases signed amounting to £6 million of annual rent at an average of 1% above previous passing rent.
“However, we expect the remainder of 2019 to be challenging due to a higher than expected level of CVAs and a slowdown in new lettings as tenants delay their decisions due the uncertainties in the current political and retail environments,” he said.
“Despite the current operating environment, I believe we have a very good business and am confident we can meet the challenges we are facing head on. I look forward to updating the market on strategy alongside our interim results in July.”
Roberts said his priority is to reduce the group’s debts with a recent sale of a 50% interest in Intu Derby at book value “a positive first step”.
Intu has 17 centres in the UK and in Spain own three of the country’s top-10 centres, with advanced plans to build a fourth.
The group’s centres attract around 400 million customer visits a year.
