// Intu & British Land issue outlook warnings as coronavirus pandemic hits rent payments
// Intu said it only received rental payments from just under a 1/3 of its retail tenants and discussions were ongoing with others
// British Land said deferrals from this quarter’s rent payments to total around £40m
Shopping centre owners have warned of an uncertain outlook after the coronavirus pandemic hit rent payments.
Intu said it received only 29 per cent of rent payments due on Wednesday – the payment deadline for the second quarter – and said it was still in discussions with retail tenants over outstanding rents.
The Trafford Centre owner warned that reduced activity by shoppers has impacted footfall and potential future rents.
- Intu to cut service charge to support retailers amid Covid-19 chaos
- Intu on brink of collapse after “running out of options”
- Westfield affected by government Covid-19 measures
It said the prospect of rent reductions means it may need to waive its covenants on loans and the shopping centre giant said it was currently in talks with lenders.
Intu said it was also in an “ongoing dialogue” with the government in a bid to secure funds from its £330 billion business support package.
It comes after the government announced on Monday that businesses would be able to avoid their quarterly rent payment for the next three months without forfeiting their leases.
The retail property group said it has “significantly reduced capital expenditure” for the foreseeable future and is cutting back on head office costs in a bid to preserve cash.
Meanwhile, Meadowhall owner British Land said it would waive £3 million worth of rent payments from its smallest tenants for the period and is prepared to defer rent payments for other operators.
It said it expects deferrals from this quarter’s rent payments to total around £40 million.
British Land, which also runs the Ealing Broadway shopping centre, said it would suspend its annual dividend payments, although it expects earnings for the year to March 31 to be “broadly in line with expectations”.
It said only one of its retail centres, the Valentine retail park in Lincoln, has been completely shut, with others remaining open for essential stores such as supermarkets and pharmacies.
Around 200 individual units – 12 per cent of its total store portfolio – remain open, it said.
British Land said it has “significant headroom” on its debt covenants and has recently extended a £450 million credit facility.
As with high streets around the country, shopping centres have been affected by the wider retail lockdown measures announced by Prime Minister Boris Johnson on Monday night.
with PA Wires