Intu has removed its full-year financial guidance and warned that it may break banking covenants after receiving just 29% of its quarterly rent payments from tenants.
The retail property firm, which owns shopping outlets include the Trafford Centre in Manchester, said it has received 29% of the outstanding rent for the second quarter of the financial year from its tenants, which was due yesterday.
Intu, which reported a £2bn valuation loss for its last financial year earlier this month, said this time last year it had received 77% of the payments of its quarterly rents.
Intu said it is “in discussions with our customers on the outstanding rents”. Since the government ordered earlier this week that non-essential stores be closed indefinitely to suppress the spread of coronavirus, several retailers have refused to hand over rent payments to landlords.
Over the last week, businesses including Topshop owner Arcadia and B&Q-owner Kingfisher have planned to withhold or restructure their rental payments, while Debenhams, Superdry, Primark and New Look have disclosed plans to seek rent holidays of varying lengths.
Intu was already under intense pressure amid its falling valuation and had unveiled plans to slash service charges in its shopping centres earlier this week in a bid to relieve pressure on its tenants.
The property firm now says: “The impact of the reduced rents received is expected to require us to seek covenant waivers and we are in constructive discussions with the relevant lenders.”
The firm said coronavirus has also delayed it from offloading its shopping centre in Puerto Venecia, Spain, and the business now expects to receive the £95m proceeds from this sales in the middle of May at the earliest. As of March, Intu said it had immediately available cash facilities of £184m.
Intu said it would be seeking access to the UK government’s £330bn coronavirus support package, and was unable to provide guidance for its 2020 financial year due to the ongoing uncertainty.
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