UK REIT Intu booked a slight increase in net rental income (NRI) in the first six months of the year to £226 mln as underlying earnings slipped slightly to £99 mln.
The London-listed retail specialist, which has activities in the UK and Spain, attributed the income growth to acquisitions, as like-for-like NRI was down by 1.5% following a strong performance of +7.5% in the year-earlier period.
The company said it was ‘slightly behind’ its original targets of reletting some of its larger units vacated by failed retailer BHS and that its guidance for full year like-for-like net rental income was now around 0%, at the bottom end of the previously announced range of 0-2%.
However, the company’s longer term growth prospects remain undiminished, CEO David Fischel said, adding that Intu performed ‘robustly’ over the six-month period in a UK retail environment which continues to be challenging.
‘Retail brands are being selective in their expansion, looking at established locations such as our 17 prime shopping centres which are attracting high footfall through their differentiated offering and compelling customer experience,’ he said in a press release highlighting the company's first-half earnings.
During the six-month period, Intu concluded 103 lettings in the UK and Spain at an average 7% above previous passing rents, including brands such as Next, River Island, Hugo Boss, Gant, Paul Smith, Victoria’s Secret and Tesla. Overall occupancy was flat at 95.9% while footfall decreased by 0.5% over the period, nevertheless still outperforming the national ShopperTrak retail average which fell by 2.7%.
Acquisitions, the opening of new developments and revaluations helped lift the portfolio to €10.5 bn at end-June from €9.9 bn at end-2016.
