Coronavirus: Intu to slash service charges for retail occupants

A spokesman for the struggling shopping centre operator said it planned to lower its service charges for tenants by 22% in the second half of the 2020 financial year, delivering an 11% overall reduction on the year, as both it and its occupants struggle to ride out the ongoing coronavirus crisis.

“We will work closely with our tenant customers to help mitigate the challenges we are all facing,” said a spokesman.

“We have already written to our customers to let them know we have been able to find additional cost savings to reduce the 2020 service charge budget by 22% in the second half delivering an 11% reduction for the full year.”

The landlord, which owns centres such as Lakeside in Essex, said while the business rates holiday announced last week by the chancellor of the exchequer was welcomed, “more support was needed” for businesses battling to deal with the effects of the virus.

“We welcomed the business rates holiday and other measures recently announced by the government, but more support is needed. The retail and leisure industries will be among the hardest hit by the Coronavirus and we will be working closely with our customers, other landlords and industry associations to best represent their needs in Westminster.”

Intu made the decision ahead of the first quarter of occupant’s rents falling due today and comes at a bad time for the landlord which already found itself struggling before the coronavirus epidemic struck.

Earlier in March, Intu reported a £2bn loss for the financial year ending December 31, 2019 and warned of a “material uncertainty” in its ability to continue operating.

While all shopping centre owners have been hit hard over the last two years by retailer administrations and CVAs, Intu in particular have born the brunt and, as a result, had written down the value of its centre portfolio by £2bn.

Retail Week understands that at least one other institutional landlord is considering similar measures to support tenants struggling to deal with the ongoing coronavirus crisis, which only yesterday saw the government announce that all ‘non-essential’ shops in the UK must shut.

It has emerged in the last few weeks that a number of retailers including the likes of fast fashion giant H&M, struggling department store chain Debenhams and fashion brand New Look have all been looking to in discussions with landlords about substantial rent holidays.