Shopping centre giant Intu has reported growth in revenues, profits and footfall in its full year results, outpacing the wider retail property sector.
In the full year to December 31, Intu saw net rental income rise 0.5 per cent including a sharp pick up in the second half rising 2.4 per cent. Though this represented the third consecutive year of net rental growth, it slowed significantly from the 3.6 per cent rise a year prior.
Profits over the period rose 18 per cent to £203 million, while its centres were 96.1 per cent let, remaining largely flat during the year. This is largely due to reletting former BHS stores with retailers including Next, Primark and Uniqlo.
Its £180 million Intu Watford extension is also reportedly on budget and on target to open in October this year.
In the coming year, Intu expects to see a 1.5-2.5 per cent growth in net rental income, rising to 2-3 per cent over the next three to five years.
Shares prices dropped 1.2 per cent despite the growth, as investor fear that Intu’s strong performance in Spain has offset slower growth in the UK.
Investors will also be cautious of the imminent takeover of Intu by Hammerson, which so far has seen the latter’s share prices drop 14 per cent due to fears the quality of its estate will be diluted.
“The underlying strengths of the intu business were much in evidence in 2017 as we recorded a robust overall performance, confounding the external gloom and negativity in pre-Brexit UK about retail and retail property,” Intu chief executive David Fischel said.
“We recorded a strong year of leasing activity, signing 217 long-term leases in the UK and Spain, at rents in aggregate seven per cent ahead of previous rents, as retailers continue to focus on increasing their space in prime, high footfall retail and leisure destinations such as our shopping centres.”