The chief executive of Intu has said that the landlord will stand firm should Primark or any other retailer request rent reductions on schemes in line with those who have recently undergone CVAs.

The new chief executive of the embattled landlord, Matthew Roberts ruled out bowing to pressure from tenants such as Primark that might be looking to request rent reductions in line with other retailers on Intu sites which have recently successfully restructured through CVAs.

Roberts said Intu is “not in the business of discounting our space” and claimed the only time the landlord would have these discussions was at the beginning of a new lease or the end of an old one.

“The time we hold discussions is when we are looking to get a new lease signed. Or when one lease ends and they want to start a new lease. We are not in the business of discounting our space. We are not about to do a wholesale rebasing lowering of our rents,” he said.

Roberts said he would meet with Primark over the next few weeks and that the value retailer is “doing very good business” on its sites.

He added: “I’m seeing Primark in a few weeks’ time. I have seen Primark’s peers and they all have contacts with us. None of them are able to rip up that contract at will and start again, and the likes of Primark we are doing very good business with. There is no short-term pressure to rip up leases and start again.”

Primark is reportedly “hacked off” that competitors have gained a competitive advantage from lower rents as a result of implementing CVAs in the first half of the year and is looking to slash rents on some of its 189 UK stores by as much as 30%. 

Roberts’ comments come after the landlord posted its half-year numbers yesterday – which saw Intu’s rental income slump 17.9% to £205.2m. On a like-for-like basis, rents were down 7.7%.

New leasing model will take ‘many years’

Roberts admitted Intu’s “transformational” strategy, released yesterday, would take “many years” to come to fruition.

“You are talking many years for a seismic change because our leases are, on average, 10 years long,” he said. “This is more flagging to my investors today that we will probably need to end up taking more operational risk.”

Intu’s share price slumped on the back of its poor results overnight, plummeting 32% to an all-time low of just 42p.

Nearly £1bn was wiped from the share values of the major retail landlords yesterday, following Intu’s update and the news that Hammerson’s net rental income had fallen 6.8% in its first half, which it announced on Monday.

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