Shopping Centres

Intu issues rental growth warning, CEO to leave

Intu Properties has warned of lower rental income growth for the full year and also announced that CEO David Fischel is to step down.

In its half-year results for the period ending 30 June Intu reported like-for-like net rental income rose by 1.3% at the lower end of its previous range of 1.5 percent to 2.5 percent.

The group also reported a £507m pre-tax loss in the six months to June, down from a £123m profit a year earlier, attributed “primarily to the property revaluation deficit”.

However, Intu did report that its occupancy levels remained at 97% when compared with the previous year.

The news comes only months after a failed £3.4bn takeover bid by rival Hammerson. CEO David Fischel was expected to stand down upon the completion of the proposed Hammerson merger, but has now announced that he is stepping down once his successor has been appointed.

Fischel said: “During a period of weakening sentiment in the retail market which has impacted prime shopping centre valuations, intu has delivered a resilient operational performance in the first half of 2018. This reflects the high quality of our business which was able to perform in a challenging retail environment.

“We agreed 116 long term leases amounting to £16m of annual rent to a number of new international entrants, as well as established key fashion brands such as Zara, River Island, Abercrombie & Fitch, Jo Malone, Jack Wills and The White Company.”

He added: “We look forward to the opening of the £180m intu Watford extension in October, followed by the £72m intu Lakeside leisure extension in the first half of next year.The Spanish business again had a strong six months with high occupancy and strong letting activity.”

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