Intu rents rise as retail confidence returns

Trafford Centre and Arndale owner Intu Properties completed 71 leases, worth a total of £13m a year, in the four months from 1 July to 3 November across its portfiolio.

The mall investor said it enjoyed "continued improvement in retailer demand", with rents 5% up compared to previous passing rents and in line with valuations.

Year-to-date footfall was up 1% and occupancy marginally reduced since 30 June 2014 at 95%, due largely to the loss of Phones 4u and La Senza, with 39 units and 1% of annual rent who failed and closed in the period.

Intu also announced a new £350m bond issue today to repay other debt. Intu recently refinanced £453m of bank facilities and agreed £763m of new facilities. The current development pipeline will cost £1.2bn. Net external debt was unchanged at £3.9bn at 30 September 2014 and the debt to assets ratio based on 30 June valuations was 44%.

Intu has started working up asset management plans at the recently acquired intu Derby and intu Merry Hill, where new lettings exceeded expectations.

David Fischel, chief executive, said: "We are pleased to see continued improvement in retailer demand for space, particularly evident in centres where we are undertaking investment and development projects. The benefits of last year's rebranding as intu have been enhanced by further customer service and digital initiatives in the period. The balance sheet is in good shape strengthened by recent financing transactions and we have a wide range of organic growth opportunities with strong momentum in our £1.2bn development pipeline."

Fischel continued: "The UK economic environment has continued to improve with a seventh consecutive quarter of GDP growth, a sustained increase in consumer confidence and like-for-like non-food sales now positive for over two years. According to the IPD retail property index, this is now beginning to translate into an uplift in retail rental values, with the index showing rental value growth for the last four months, the first positive period of this length since 2008. At Intu, we continue to see areas of increased interest from retailers, including for new brands and flagship stores, particularly in centres where we have been undertaking or have plans for capital expenditure."

Shares in Intu were unchanged at 339p.

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