TIDMINTU
RNS Number : 7810E
Intu Properties plc
06 November 2015
6 NOVEMBER 2015
INTU PROPERTIES PLC
TRADING UPDATE FOR THE PERIOD FROM 1 JULY 2015 TO 6 NOVEMBER
2015
Highlights of the period:
-- On target for a return to like-for-like net rental income
growth for the year as a whole (H1 2015: -1.0 per cent) through
improved lettings and rising occupancy
-- Continued improvement in retailer demand with 84 new long
term leases agreed for GBP18 million of new annual rent, 11 per
cent above previous passing rent (year to date: 12 per cent above)
and in line with valuation assumptions
-- Occupancy increased by 40 basis points since 30 June 2015 to 95.5 per cent
-- Year-on-year footfall to date is marginally up in the UK and
up 5 per cent in Spain, both outperforming their respective
Experian benchmarks
-- UK development pipeline on track with GBP60 million of
developments completing at intu Victoria Centre and intu Potteries,
where the cinema and restaurants are fitting out for their
scheduled openings in December 2015. On site at intu Eldon Square,
intu Metrocentre and intu Bromley with restaurant developments
-- Completed the introduction of CPPIB as our partner at Puerto
Venecia, Zaragoza, extending our partnership to two of Spain's top
ten shopping centres and releasing EUR113 million of funds for
further projects
-- Way finding and offers app successfully trialled at the
recent student nights before its national launch across all intu
centres
-- Cash and available facilities of over GBP550 million and debt
to asset ratio of 44 per cent at 30 September 2015
David Fischel, Chief Executive, commented:
"The economic recovery is now more obviously rippling out from
London and the South East to other regions of the UK and our prime
centres across the country are seeing strengthening underlying
retailer sales performance.
As this translates into improved demand for space and rising
occupancy, we look forward to a return to like-for-like net rental
income growth for 2015 and are well positioned for a more
meaningful uplift next year.
We have successfully completed development projects in
Nottingham and Stoke-on-Trent in the period and our investment
programme continues to gather momentum both in the UK and
Spain."
Optimising the performance of existing assets
The Group's operating metrics are improving as we start to close
out vacancy and bring our development pipeline on stream (see
below). We are on target, assuming no material tenant failures,
that like-for-like net rental income growth in the second half of
2015 will more than offset the shortfall in the first half
delivering a return to like-for-like growth for the full year.
In terms of lettings, 84 new long term leases were signed in the
quarter, representing GBP18 million of new passing rent, in
aggregate 11 per cent above previous passing rent and in line with
valuation assumptions. This brings the total for the year to date
to 191 new leases producing GBP35 million of new annual rent, 12
per cent above previous passing rent. Signings in the period
include:
-- Five new leases with Kiko, continuing their UK roll out. They
now have seven stores in intu centres, around a third of their
overall UK portfolio
-- Leases at intu Trafford Centre and intu Merry Hill with New
Look Men, a new standalone menswear concept launched by New Look
with a plan to open five stores nationally this year
-- International entrants continuing to expand through intu with
David's Bridal signing its second UK store at intu Braehead and
Victoria's Secret adding to its nine existing locations with a new
store at intu Lakeside
-- 13 new restaurant lettings across the portfolio including
Thaikhun at intu Metrocentre and intu Victoria Centre
We settled 27 rent reviews in the period for new rents totalling
GBP5 million, an average uplift of 7 per cent on the previous
rents. Year to date, we have settled 105 rent reviews with new rent
totalling GBP24 million, an average uplift of 7 per cent on the
previous rents.
Three units with a total rent of GBP0.1 million entered
administration in the period. This is the lowest quarterly figure
since before the start of the economic downturn some seven years
ago.
Driving forward the UK investment programme
Our UK development pipeline is on track:
-- At intu Victoria Centre, the GBP42 million mall refreshment
and catering development is complete. This has delivered new brands
to the centre such as Superdry, River Island, Kiko and Office and
the first restaurant is now open for trade with further openings
imminent
-- At intu Potteries, the GBP19 million fully let cinema and
restaurant extension opens in December, stimulating an improved
letting pipeline in the main centre
-- Catering developments at intu Metrocentre, intu Eldon Square
and intu Bromley are on site creating over 30 new restaurants.
Excellent letting progress has been made at all sites with intu
Metrocentre and intu Bromley scheduled to open fully let in Spring
2016, with the intu Eldon Square development due to open later in
2016
-- At intu Watford, we continue to see strong demand from both
retail and leisure operators for the 400,000 square foot extension.
With over 50 per cent of the project either exchanged or in
solicitors' hands, we aim to commence site clearance and demolition
before the end of the year
-- At intu Milton Keynes the council have resolved to approve
our proposed 100,000 square foot enlargement of the existing centre
bringing additional retail units, a boutique cinema and new
restaurants. This project represents a great addition to our
development pipeline and will significantly enhance the standing of
the centre
Making the brand count
-- As an example of the increasing power of the intu brand,
130,000 students, representing an increase of over 20 per cent on
the 2014 events, attended the recent student nights at 16 of our
centres. Through our nationwide brand and presence we could offer
discounts exclusive to intu and partner with the likes of O2 across
all centres
-- In September we previewed before its national launch our new
app which provides in-centre way finding, personalised special
offers and centre information in one easy to use service. The app
was developed by our in-house digital innovation team and takes
advantage of our own high quality Wi-Fi infrastructure. It was
successfully trialled at the recent student nights with all the
discounts available through the app
-- A further example of our scale and brand power was securing a
partnership with MasterCard for the Rugby World Cup 2015. In-centre
we delivered match related events and attractions including match
zones and on line launched a 'Kick the Ball' gaming app
Seizing the growth opportunity in Spain
-- The Malaga development project, intu Costa del Sol, remains
on track for a start in 2016 with a number of design enhancements
under evaluation
-- As previously announced, we completed the 50/50 joint venture
of Puerto Venecia, Zaragoza with CPPIB, extending the partnership
between Intu and CPPIB to include two of Spain's top ten shopping
centres
-- Both our centres continued to perform well in the period with
overall occupancy improving to 97 per cent. Footfall at both Puerto
Venecia and intu Asturias is up year-on-year, and we have achieved
quality new lettings at both centres at improved rental levels
Conference call
A conference call for analysts and investors will be held today
at 08:00 GMT
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
Frédéric Cornet, Instinctif
SA: Partners +27 (0)11 447 3030
NOTES FOR EDITORS
Intu is the leading owner and manager of prime regional shopping
centres in the UK.
A FTSE 100 company, Intu owns and operates many of the UK's
biggest and most popular retail and leisure destinations, including
nine of the top 20, incorporating super-regional centres such as
intu Trafford Centre, intu Lakeside and intu Metrocentre, together
with a number of city centre locations from Watford to
Newcastle.
With over 23 million sq. ft. of space hosting top UK and
international retailers from Apple to Zara, Intu centres attract
some 400 million customer visits from over half of the UK's
population every year.
Intu has a UK investment pipeline of GBP1.5 billion over the
next ten years to add 2.6 million sq. ft. of new retail and leisure
space, of which 1.7 million sq. ft. is already consented. Major
projects due to be underway soon include the extension and
refurbishment at intu Watford and the leisure expansion at intu
Lakeside.
Intu also has a growing presence in the Spanish market, owning
two of Spain's top 10 centres, intu Asturias in Oviedo, and Puerto
Venecia in Zaragoza, a development site in Malaga with options on a
further three sites in Valencia, Palma and Vigo.
intu creates a compelling experience for its customers, both on
and offline, delivering on its brand promise to provide the most
digitally connected shopping centres, world-class service and
events with a difference. National initiatives include the annual
'Everyone's Invited' event which in 2014 increased footfall that
weekend by an average of 13%. Our objective is for customers to
come more often and stay for longer, in turn helping intu's
retailers to flourish.
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