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Intu issues income warning

Shopping centre owner Intu Properties said it expects full-year like-for-like net rental income for the three months to 30 September to be down 9% year on year, blaming company voluntary arrangements at Arcadia Group and Monsoon for “more than half” of the reduction.

It follows a difficult third quarter for the property owner, which said it continued to face “challenging” market conditions and that “CVAs were slightly worse than expected”.

CEO Matthew Roberts added: “We continue to consider all options to put us in the best position to deal with both our short- and medium-term liquidity requirements, as we approach our next material debt maturity in early 2021.

”These options include disposing of assets … through to raising equity, which is also likely to form part of the solution.”

Letting activity was “slower than forecast and at a lower level than 2018” during the period. Intu agreed 46 long-term leases worth £5m of annual rent, compared with 84 leases worth £15m the year before. It blamed CVAs, and political and economic uncertainty for causing customers to delay lettings.

Footfall to its shopping centres was up by 1.2% year on year in the period, but its occupancy rate fell from 97% to 95.1%.

Year-to-date UK footfall was up by 0.4% following extensions at both Intu Watford and Intu Lakeside.

Intu reduced its net external debt by £210m after “part disposal” of Intu Derby, with a loan to value of 57.7%.

Intu listed quarter highlights as settling 34 rent reviews and “key” lettings from Harrods’s standalone beauty store, H Beauty at Lakeside, and Zara at St David’s in Cardiff.

Looking ahead, Intu will continue to focus on “fixing” the balance sheet and to “reshape [its] business and address the challenges [it] faces”.

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