Intu shopping center company warns of sharp drop in rental income | Business

The owner of the Intu shopping center warned of a larger drop in rental income this year, as distressed retailers close their stores faster than expected.

The owner of the Trafford Center said the Brexit uncertainties were also impacting rental demand and that it would suffer from a further increase in Voluntary Agreements with Business (CVA), a process of Insolvency used by companies in difficulty to close their underperforming stores and reduce their rents.

His shares fell from 8% to 92p. Two years ago, they changed control to 279 points and are worth less than 10% of their peak before the financial crisis.

It is understood that the Company has not taken into account the potential store closures of Debenhams and Sir Philip Green's Arcadia as part of its previous forecast. Debenhams revealed last week its intention to close 22 department stores. None on his current list is found in Intu centers, said the owner, but others are expected.

"We expect the rest of 2019 to be challenging due to higher CVAs than expected and slower new leases as tenants delay their decisions due to uncertainties surrounding the current political and business environments," said the director. General of Intu, Matthew Roberts, said me.

"As such, we have revised our approach with respect to our end-of-year net rental income to take into account the expected CVAs and we have adjusted our guidance for 2019 accordingly by minus four to six per cent," he added.

Intu, who also owns Merry Hill in the West Midlands, Gateshead's metocentre and Braehead in Glasgow, had already forecast a drop of only -1% to -2%.

The company released the market update before its AGM on Friday.

Intu has struggled with the growing retail crisis, which has also affected rival Hammerson. Last year, Hammerson abandoned plans to buy Intu for £ 3.4 billion, under shareholder pressure.

Figures released by the local data company earlier this week showed that the number of empty empty stores had increased by more than 7,500 last year. The most affected retail chains are Poundworld, Maplin, Toys R Us and Multiyork, which are now part of the administration.

There was no break in 2019, the empire Arcadia Green, head of Topshop and Green Topshop, to close dozens of stores. Marks & Spencer is also closing 100 stores by 2022.