The shopping centre business said in a trading update that it intends to start the £74m extension and enclosure of Barton Square at the Trafford Centre once an anchor tenant is signed.
Within its interim results published today, Intu, which wholly owns the Trafford Centre and holds a 48% stake in Manchester Arndale, reported a climb in revenue to £307.3m, up from £285.5m for the first half of 2016.
Although like-for-like rental income has slipped by 1.5% across the group, net rental income increased following acquisitions. Like-for-like property values have risen slightly, with a 0.2% increase in line with the IPD monthly retail index.
Intu said that Barton Square’s “construction is expected to start in early 2018, once the key anchor tenant is signed, and is expected to deliver a return of 6-7%”.
The Barton Square project will add 110,000 sq ft of additional retail space and is intended to moving the existing retail profile of Barton Square away from bulky goods.
The project forms part of the group’s £679m development programme, which chief executive David Fischel said remains on track.
Fischel said: “Intu has performed robustly over the six month period in a UK retail environment which continues to be challenging. Retail brands are being selective in their expansion, looking at established locations which are attracting high footfall through their differentiated offering and compelling customer experience.
“The resilience of the tenant market in our centres is shown by our 103 lettings in the period at 7% above previous passing rents, including brands such as Next, River Island, Hugo Boss, Gant, Paul Smith, Victoria’s Secret and Tesla.
“Also our tenants continue to invest in upsizing and upgrading their units which has resulted in maintained high occupancy.”