Intu suffers drop in footfall but rental income rises

Shopper numbers to the property giant’s malls decreased 1.6% in the year to December 31, 2018. However, it insisted that was better than the national ShopperTrak average for retail destinations, which slumped 3.5%.

Intu said that, despite “a difficult retail and uncertain economic environment”, it registered a 0.6% uptick in like-for-like rental income.

However, net rental income came in at £450.5m, down on the £460m it recorded the previous year.

The business secured 248 new leases during 2018, bringing in £39m in new rent. But occupancy of its units dropped slightly to 96.7%, compared to 97% in 2017.

Intu invested £201m in its centres during the financial year, including £67m on the 380,000 sq ft extension of Intu Watford and £40m on the leisure extension at Intu Lakeside.

Despite such moves to improve its centres, the value of Intu’s assets tumbled 12.9% year on year to £9.17bn.

The shopping centre landlord admitted it had been a “challenging year”, with two separate takeover bids for the company – from rival Hammerson and a consortium headed by John Whittaker – both canned.

But chairman John Strachan said its financial performance was “testimony to our long-term strategy of investing in our centres and the Intu brand, making them different, attractive and exciting so retailers look to our centres as key trading locations”.

Strachan said the business would focus on three key areas in 2019: delivering “strong” performance within its individual centres, adapting its proposition to fit the “changing retail environment” and making “smart use” of capital expenditure.

He added that Intu would retain cash generated by its centres, rather than pay out a dividend, in order to invest further in its malls.