Intu launches joint venture in Chapelfield centre as it posts strong quarterly update

Intu Monsoon

Shopping centre giant Intu has reported another strong quarter of tenant demand, while announcing it has introduced a 50 per cent joint venture partner for its centre in Norwich.

For its quarterly period ending November 2, Intu recorded an “active period” of 73 long term leases agreed – 63 in its UK centres and 10 in Spain – for £13 million of annual rent, five per cent above the previous passing rent and six per cent above on a year-to-date basis.

Occupancy remains also high at 96 per cent, unchanged from June 2017.

Footfall grew in the second half year-to-date at two per cent ahead of the same period in 2016 – bringing the overall figure for 2017 back in line with 2016.

The shopping centre operator now anticipates positive like-for-like net rental income for a third year in 2017, in line with earlier guidance and consolidating the growth it achieved in 2015 and 2016 fiscal years.

“Although retailers continue to be selective with their expansion plans in the challenging
consumer environment, our 20 prime centres are the first port of call because of their strong catchment, reliable footfall and differentiated leisure content,” Intu chief executive David Fischel said.

“This leaves us well positioned to take advantage of this demand and we are confident of delivering further growth in like-for-like net rental income in 2018 and at a level of two to three per cent over the medium term.”

Intu also used its trading update today to announce it has exchanged contracts with LaSalle Investment Management for 50 per cent joint venture for Intu Chapelfield in Norwich.

This means LaSalle will acquire a 50 per cent interest in the shopping centre for net consideration of £148 million before working capital adjustments, which represents a net initial yield of five per cent.

Intu will continue to manage the centre on behalf of the joint venture.

The deal is in line with Intu’s strategy of introducing partners to its assets and recycling capital into the UK development pipeline.

Meanwhile, Intu said the £73 million leisure extension at Intu Lakeside was on track for
opening at the end of next year, with all four leisure anchors now let and the
overall project 85 per cent pre-let.

Other extensions, including Intu Watford and Barton Square at Intu Trafford Centre, are progressing to plan.

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