Shopping centre owner Intu has launched a five-year “transformational strategy” after a challenging first half plagued by retailer company voluntary arrangements (CVAs) saw its rental income tumble.
Intu Properties owns shopping centres across the UK, including Manchester’s Intu Trafford Centre, Intu Lakeside in Essex and Intu Potteries in Stoke-on-Trent.
It’s like-for-like net rental income fell 7.7% to £205.2m in the six months to 30 June, while its property revaluation deficit widened to £872.1m, from £650.4m during the same period last year.
Revenue dropped 6.2% to £279.9m due to a reduction in rents received. Its overall loss for the first half widened to £829.6m.
Intu CEO Matthew Roberts said: “The first half of 2019 has been challenging for Intu. We have experienced further downward pressure on like-for-like net rental income and property values resulting from a higher level of administrations and CVAs as some retailers struggle to remain relevant in a multichannel world.
”These challenges, facing Intu and the whole sector, have been well-documented and, while there are no quick fixes, I am confident that we can address them head on. Over the past nine months we have carried out the most comprehensive review of the business that intu has ever undertaken.
“We know radical transformation is required and have developed a new, ambitious five year strategy to reshape our business and address the challenges we face, with a priority to fix our balance sheet. With the people changes we have made, we now have the right leadership team in place with the appropriate skill sets to deliver this plan and drive the business forward.
“Regardless of current sentiment, one thing is clear: the physical store is not dying, it is evolving. The right store in the right location still plays a vital role in retailers’ multichannel strategies and we are starting to work with them as partners sharing the risks and rewards.
“Our centres will also transform as we turn them into thriving communities – places where people want to live, work and have fun, as well as shop. Change will not happen overnight, but I am confident we have the right plan in place and an energised, dynamic team to deliver it.”