UK shopping centre specialist Intu Properties said on Wednesday that it could raise equity, alongside asset sales, to tackle its debt burden.
'Our number one priority is to fix the balance sheet,' said Matthew Roberts, Intu’s chief executive. 'We have a clear plan to do this and are working to make material progress over the next six months.'
Roberts said that they group continues to consider 'all options' to be in the best position to deal with both its short and medium term liquidity requirements as it approaches its next material debt maturity in early 2021. 'These options include disposing of assets, where we are in the advanced stages of selling two of our Spanish assets, through to raising equity, which is also likely to form part of the solution,' he added.
Intu is in final negotiations to sell two of its flagship malls in Spain – Intu Asturias and Intu Puerto Venecia for a total of over €400 mln. The group is finalising the deals with ECE on Intu Asturias, and with Generali on behalf of the newly-launched Shopping Centre Fund on the Puerto Venecia asset. Both properties are owned on a 50-50 basis together with Canadian pension fund CPPIB, which also has the right of first refusal on both assets, should they be sold.
In its third-quarter results, the UK REIT said it expects annual like-for-like net rental income to be down by about 9% and predicted another decline in 2020, although at a slower rate. Around 50% of this decline is attributed to CVAs which were worse than expected, the group said.
Intu's LTV remained broadly steady at 57.7% (based on June valuations) from 57.6% at H1-19 despite a £210 mln reduction in net external debt.
