Shopping centre landlord, Intu, has this morning updated the market on trading from 1 January to 3 May.
It said occupancy is 95.8%, marginally reduced from 96% to 31 December 2016 reflecting seasonal fluctuations since Christmas.
It signed 42 long term leases agreed (36 in the UK and 6 in Spain) for £6m of annual rent, 5% above previous passing rent and in line with valuers’ assumptions
It said year-on-year footfall to date is unchanged and continued to outperform the UK ShopperTrak benchmark, which is down 2.5%.
Intu reported unchanged guidance for growth in like-for-like net rental income for the year in the range of 0 per cent to 2 per cent. As previously stated, this is expected to be down in the first half, against the strong 2016 comparative, and up in the second half year and takes account of the impact of up to 2% from units being held for redevelopment and the full year impact of BHS closures. The precise outcome will be particularly dependent on the timing of letting some of the larger.
The group listed several key milestones in the UK, including:
• the £180 million retail and leisure extension of intu Watford continues on budget and on target for opening in autumn 2018. With the main anchors and the majority of the restaurants exchanged, we are now making good progress on letting the remaining retail units
• at intu Lakeside, we now have around 90 per cent of the space of the £73 million leisure scheme exchanged or in solicitors’ hands, including the recent letting to Hollywood Bowl. We are reviewing construction tenders and expect to commit to and be on site this summer, for an expected opening at the end of 2018
• at intu Broadmarsh, Nottingham, we have exchanged contracts with The Light Cinema to operate the nine screen cinema that will anchor the redevelopment of the centre and we are continuing with detailed design work, including the incorporation of the former BHS space
David Fischel, intu chief executive, said: “The active tenant demand of last year has continued into the current year with 42 long term leases signed in the first quarter representing £6 million of annual rent, 5 per cent above the previous passing rent. We have attracted a number of well-known international brands such as Hugo Boss, Guess, Tesla and Tag Heuer.
“We have made further progress with our development pipeline. We are particularly focussing on creating a differentiated leisure element and 90 per cent of the space in the intu Lakeside extension is either exchanged or in solicitors’ hands, well ahead of the opening at the end of 2018.
“Occupancy continues to remain high in Spain with strong tenant demand. During the period we acquired Madrid Xanadú shopping centre for €530 million, taking our ownership to three of the top ten Spanish centres.
“Although retailers are being selective with their expansion plans, they are prioritising expansion to prime established locations with strong footfall. intu as the UK market leader with 17 prime centres is well positioned to take advantage of this demand.
“The environment for business this year is likely to be challenging with considerable uncertainty regarding the UK’s EU exit. However, it is our intention to deliver continuing growth in like-for-like net rental income.”