// Canada Pension Plan Investment Board seeks sale of Trafford Centre after sinking Intu’s rescue efforts last week
// CPPIB has a £250m loan secured against Trafford Centre and hopes to recover that debt via a sale
// Out of Intu’s 17 shopping centres in the UK, Trafford Centre remains its most valuable asset
The Canadian pension fund that dropped a bombshell in Intu’s rescue talks which led to its administration is now reportedly pushing for the sale of one of its prime shopping centres.
According to The Sunday Times, Canada Pension Plan Investment Board (CPPIB) dashed all hopes of a rescue Thursday afternoon by not agreeing to a 15-month debt standstill.
Without the Trafford Centre secure, the seven banks behind Intu’s revolving credit facility also reportedly refused to support the standstill, prompting Intu to file for administration on Friday.
READ MORE:
- Intu officially falls into administration
- Intu on verge of administration after talks with lenders fail
- Intu to file for administration if crunch talks with lenders fail this week
Out of Intu’s 17 shopping centres in the UK, Trafford Centre remains its most valuable asset.
The Sunday Times said CPPIB was planning to seize control the Manchester shopping centre via a £250 million loan secured against it, and that it felt upbeat about investor appetite to be able recover that debt via a sale.
In addition to the CPPIB debt, there is reportedly around £690 million worth of loans secured against Trafford Centre.
Considered is the third largest shopping centre in the UK by retail size, Trafford Centre was developed by the Peel Group in the late 90s before it was sold to Intu in 2011 in a deal worth £1.65 billion – the largest single property acquisition in British history.
Peel Group’s chairman and majority owner is John Whittaker, who also holds a deputy chairman position at Intu after the 2011 Trafford Centre deal.
The Sunday Times suggested Whittaker could be one of the potential bidders for Trafford Centre.
Before Intu started talks with lenders to try and avoid administration, it was battling with £4.5 billion in debt and a dramatic plunge in rental income across the last two quarters due to the coronavirus pandemic and subsequent lockdown.
The most recent quarterly rent bills, due last week, saw UK retailers pay just 14 per cent of what they owed to landlords nationwide.
Although Intu’s administration saw it suspended from the London Stock Exchange, its shopping centres – which are held in separate operating companies – will continue to trade for the time being despite its insolvency.
However, control of each Intu shopping centre is expected to pass to their respective lenders who may try to sell them.
Intu employs about 3000 staff across the UK, while a further 102,000 work for the shops within its shopping centres.
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