Nine out of 10 former BHS stores at Intu shopping centres across the country have yet to find tenants although progress is being made, chief finance officer Matthew Roberts told Drapers today.
The firm announced in October that Next will open one of its biggest ever stores on the site of a former BHS at Intu Metrocentre, reconfiguring some 85,000 sq ft of space for the new location, which is set to open next year.
The shopping centre owner expects to make an announcement on the other stores later this year. Roberts said a number of tenants are interested in the space, as part of a wider trend of retailers looking for a smaller number of bigger stores.
However, Will Thomas, partner at KLM Retail said the size of the stores was probably the main factor behind the delay. “They are bigger than people now need,” he explained. “Landlords are waiting to split the stores down and find the right tenants for the constituent parts.”
Roberts was speaking to Drapers after Intu reported a 4.4% rise in rental income to £447m in the year to the end of December. Underlying profits increased by 7% to £200m and it raised its dividend for the first time in 10 years from 13.7p to 14p.
He pointed to retailers including Zara, New Look and JD Sports as examples of retailers increasing their space in Intu centres, while Inditex is introducing some of its other brands, such as Stradivarius and Pull & Bear, which both recently opened at Intu Trafford Centre. New Look has also been expanding with its dedicated menswear stores.
He was bullish about the strength of the market, explaining: “We have got as good a pipeline [of new lettings] as 12 months ago. Most retailers did the numbers they hoped to over Christmas and we’re not expecting a material round of tenant insolvencies.”
Roberts the current business rates revaluation is fiscally neutral for Intu as it has a nationwide portfolio, like fellow shopping centre owner and property developer Hammerson. But he maintained that the company’s position is that the rates burden needs to be looked at as part of a wider review.
He also revealed that the company is close to signing a deal with an international fashion retailer to go into the Trafford Centre.