Shopping centre owner Intu sees property value knocked
Retailers including Toys R Us, Maplin and House of Fraser have collapsed this year.
Takeover target Intu has seen the value of its shopping centres drop following difficult retail conditions.
The group, which is being courted by a consortium led by John Whittaker’s Peel Group, said its net asset value fell 3% in the third quarter.
This, Intu said, “reflects current negative investor sentiment towards UK retail property”.
The revaluation comes on top of a 5.6% fall in its property values in the first half of the year and comes amid a high street bloodbath.
The likes of Toys R Us, Maplin and House of Fraser have collapsed this year, with several other retailers announcing store closure programmes.
Intu is behind 18 shopping centres across the UK, including the Trafford and Arndale Centres in Manchester, Lakeside in Essex and Metrocentre in Gateshead.
Intu’s portfolio was valued at £9.58 billion as at September 30.
Last week, Mr Whittaker’s Peel Group, Olayan and Brookfield Property tabled a £2.8 billion offer for Intu.
The consortium has been granted access to company documents for due diligence as it considers whether to make a firm offer.
The bidders must decide by November 1.
Between them, Peel Group and Olayan Group already hold 29.9% if Intu.
Intu added that it expects to take a 1.5% hit on rental income from high street failures that have marred the year.
In 2018, Intu expects like-for-like net rental income growth of up to 1% in 2018, while the aim is for 2% to 3% of growth per year over the next three to five years, although in 2019 Intu expects only 1% growth.
Occupancy has improved, it said, to 97% in September from 96.6% in June, while tenant demand has continued with 84 new leases signed in the third quarter compared with 73 in the same period a year earlier.