Wrap Text
AGM Trading Update for the Period from 1 January 2017 to 3 May 2017
INTU PROPERTIES PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: ITU
3 MAY 2017
INTU PROPERTIES PLC
LEI: 213800JSNTERD5CJZO95
Regulated Information Classification: Additional regulated information required to be disclosed under
the laws of a Member State of the EU
AGM TRADING UPDATE FOR THE PERIOD FROM 1 JANUARY 2017 TO 3 MAY 2017
David Fischel, intu Chief Executive, commented:
“The active tenant demand of last year has continued into the current year with 42 long term
leases signed in the first quarter representing £6 million of annual rent, 5 per cent above the
previous passing rent. We have attracted a number of well-known international brands such
as Hugo Boss, Guess, Tesla and Tag Heuer.
We have made further progress with our development pipeline. We are particularly focussing
on creating a differentiated leisure element and 90 per cent of the space in the intu Lakeside
extension is either exchanged or in solicitors’ hands, well ahead of the opening at the end of
2018.
Occupancy continues to remain high in Spain with strong tenant demand. During the period
we acquired Madrid Xanadú shopping centre for €530 million, taking our ownership to three
of the top ten Spanish centres.
Although retailers are being selective with their expansion plans, they are prioritising
expansion to prime established locations with strong footfall. intu as the UK market leader
with 17 prime centres is well positioned to take advantage of this demand.
The environment for business this year is likely to be challenging with considerable
uncertainty regarding the UK’s EU exit. However, it is our intention to deliver continuing
growth in like-for-like net rental income.”
Highlights of the period:
- Continued active retailer demand with 42 long term leases agreed (36 in the UK
and 6 in Spain) for £6 million of annual rent, 5 per cent above previous passing
rent and in line with valuers’ assumptions
- Occupancy is 95.8 per cent (March 2016: 95.3 per cent), marginally reduced
from 96.0 per cent at 31 December 2016 reflecting seasonal fluctuations since
Christmas
- Year-on-year footfall to date is unchanged and continuing to outperform the
UK ShopperTrak benchmark which is down by 2.5 per cent
- Unchanged guidance for growth in like-for-like net rental income for the year in
the range of 0 per cent to 2 per cent. As previously stated, this is expected to
be down in the first half, against the strong 2016 comparative, and up in the
second half year and takes account of the impact of up to 2 per cent from units
being held for redevelopment and the full year impact of BHS closures. The
precise outcome will be particularly dependent on the timing of letting some of
the larger units currently under active discussions.
- intu Lakeside leisure extension on track with around 90 per cent of lettings
either exchanged or in solicitors’ hands and we shortly expect to commit to
this project
- Continued progress on our digital initiatives, including adding augmented
reality technology to our in-centre app
- Completed the acquisition of Madrid Xanadú for €530 million and currently well
advanced in discussions with a potential joint venture partner
- On site redeveloping a previously underutilised space at intu Asturias and new
lettings in our Spanish centres are ahead of previous rents
- Cash and available facilities of £694 million and debt to asset ratio of 46 per
cent at 31 March 2017. This will reduce by 1 per cent once we introduce a
partner to Madrid Xanadú
Optimising asset performance
The Group’s operating metrics remain strong, with levels of tenant activity similar to last
year. 42 long term leases were signed in the quarter, representing £6 million of annual rent
(Q1 2016: 43 long term leases; £7 million of annual rent). In aggregate, these were 5 per
cent above previous passing rent and in line with valuers’ assumptions. Signings in the
period include:
- aspirational brands continuing to recognise the attraction of destination shopping
centres, with Hugo Boss and Guess joining the line up at intu Metrocentre, Tesla at
intu Milton Keynes and Tag Heuer opening its first store in the West Midlands at intu
Merry Hill
- traditional retail park tenants introducing smaller format stores in prime high footfall
locations. This includes Decathlon at intu Uxbridge, taking part of the former BHS
unit, and Sharps Bedrooms at intu Lakeside, intu Eldon Square and intu Broadmarsh
- restaurants previously focused on London and the south east looking to grow
nationally with Leon opening its first store in the north west at intu Trafford Centre
and Byron opening its first Welsh restaurant at St David’s, Cardiff
We settled 58 rent reviews in the period for new rents totalling £10 million, an average uplift
of 7 per cent on the previous rents.
Jones the Bootmaker (three units) and 99p Stores (one unit) entered administration in the
period. These administrations amount in total to 0.2 per cent of intu’s rent roll.
Of the 10 BHS stores that closed in 2016, we have now relet two units, are in advanced
negotiations on four units and two form part of redevelopment projects at intu Broadmarsh
and intu Watford. The remaining two units are at earlier stages of negotiations.
UK development momentum
Key milestones in the period include:
- the £180 million retail and leisure extension of intu Watford continues on budget and
on target for opening in autumn 2018. With the main anchors and the majority of the
restaurants exchanged, we are now making good progress on letting the remaining
retail units
- at intu Lakeside, we now have around 90 per cent of the space of the £73 million
leisure scheme exchanged or in solicitors’ hands, including the recent letting to
Hollywood Bowl. We are reviewing construction tenders and expect to commit to and
be on site this summer, for an expected opening at the end of 2018
- at intu Broadmarsh, Nottingham, we have exchanged contracts with The Light
Cinema to operate the nine screen cinema that will anchor the redevelopment of the
centre and we are continuing with detailed design work, including the incorporation of
the former BHS space
Making the brand count
Global brands continue to see the benefit of partnering with intu both in-centre and digitally:
- we have launched ‘Foodpreneur’ with Virgin StartUp to find aspiring food
entrepreneurs with the semi-finalists and winner to have in-centre pop-ups and
access to intu.co.uk
- we have furthered our collaborations with Nick Jr., Nickelodeon’s pre-school
television channel, over the Easter holidays adding augmented reality technology to
our in-centre app to deliver a new family experience to our customers. This runs
alongside other Nick Jr. in-centre events with a view to delivering increased dwell
time
On our online shopping platform, we have had strong sales growth against the same period
last year. This is driven by the quality editorial content, with visits to our ‘Shop Insider’ pages
increasing substantially, and our social media audience of over one million.
Seizing the growth opportunity in Spain
We acquired Madrid Xanadú shopping centre for €530 million, taking our ownership of
Spanish shopping centres to three of the top ten. We are intending to introduce a joint
venture partner to the centre and are well advanced in discussions with a potential partner.
Occupancy at our centres remains high, with continued strong tenant demand. We agreed
six long term leases in the period, in aggregate ahead of the previous rents and valuers'
assumptions.
Corporate responsibility
We are performing strongly against our 2020 environmental targets, set against a 2010 base
line, with 47 per cent intensity reduction in carbon emissions (target 50 per cent), 100 per
cent of waste diverted from landfill of which 74 per cent is recycled (targets 99 per cent and
75 per cent respectively) and a 14 per cent water intensity reduction (target 10 per cent).
People are at the heart of what we do and in 2017 we have achieved the internationally
recognised accreditation Investors in People gold standard across all intu branded centres.
This highly regarded achievement defines what it takes to lead, support and manage people
well for sustainable results.
Conference call
A conference call for analysts and investors will be held today at 08:00 BST.
A copy of this press release is available for download from our website at intugroup.co.uk.
ENQUIRIES
Intu Properties plc
David Fischel Chief Executive +44 (0)20 7960 1207
Matthew Roberts Chief Financial Officer +44 (0)20 7960 1353
Adrian Croft Head of Investor Relations +44 (0)20 7960 1212
Public relations
UK: Justin Griffiths, Powerscourt +44 (0)20 7250 1446
SA: Frédéric Cornet, Instinctif Partners +27 (0)11 447 3030
NOTES FOR EDITORS
intu is the UK's leading owner, manager and developer of prime regional shopping centres
with a growing presence in Spain.
We are passionate about creating uniquely compelling experiences, in centre and online,
that attract customers, delivering enhanced footfall, dwell time and loyalty. This helps our
retailers flourish, driving occupancy and income growth.
A FTSE 100 company, we own many of the UK's largest and most popular retail
destinations, including nine of the top 20, with super regional centres such as intu Trafford
Centre and intu Lakeside and vibrant city centre locations from Newcastle to Watford.
We are focused on four strategic objectives: optimising the performance of our assets to
provide attractive long term total property returns, delivering our UK development pipeline to
add value to our portfolio, leveraging the strength of our brand and seizing the opportunity in
Spain to create a business of scale.
We are committed to our local communities, our centres support over 120,000 jobs
representing about 4% of the total UK retail workforce, and to operating with environmental
responsibility.
Our success creates value for our retailers, investors and the communities we serve.
Sponsor:
Merrill Lynch South Africa (Pty) Limited
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