Intu Properties has posted what it described as a 'rock-solid set of results' for 2017, thereby 'confounding the external gloom and negativity in pre-Brexit UK about retail and retail property.'

intu victoria centre

Intu Victoria Centre

The London-listed UK and Spanish shopping centre landlord said that its asset performance was 'resilient in the UK and buoyant in Spain'. This resulted in a revaluation surplus of £47 mln that drove an increased profit for the year of £203 mln (€229 mln) compared to £172 mln the year before. Net asset value per share increased from 404 pence to 411 pence.

Amid the challenging retail environment in the UK, Intu's like-for-like net rental income grew 0.5% - a third year of consecutive growth - with a strong recovery in the second half of +2.4%. Occupancy remained stable at 96.1%. Footfall across its portfolio increased marginally by 0.1% to 400 million visitors in 2017 compared with a -2.8% fall in the national ShopperTrak retail average.

Intu's CEO David Fischel commented: 'The underlying strengths of the Intu business were much in evidence in 2017 as we recorded a robust overall performance, confounding the external gloom and negativity in pre-Brexit UK about retail and retail property.

'We recorded a strong year of leasing activity, signing 217 long-term leases in the UK and Spain, at rents in aggregate 7% ahead of previous rents, as retailers continue to focus on increasing their space in prime, high footfall retail and leisure destinations such as our shopping centres.

'Our asset performance was resilient in the UK and buoyant in Spain, resulting in a revaluation surplus of £47 million, which in turn drove an increased profit for the year of £203 mln (2016: £172 mln) and took net asset value per share from 404 pence to 411 pence. Other key performance indicators, such as 96 per cent occupancy and increased footfall for the year, also demonstrated that Intu is in good shape.'

The 2017 results have been published just over two months after Hammerson, another UK-listed retail landlord, announced a bid to buy Intu for €3.86 bn.

UK and Spanish portfolio
Intu's portfolio comprises of 17 shopping centres, including ten of the top 25. Fischel: 'We moved on at pace with our investment plans, with significant projects underway at Intu Watford, Intu Lakeside and a number of other centres. In the UK, we spent £184 mln during the year and have plans to invest a further £562 mln over the next three years, with plenty of opportunity beyond that period, at returns we anticipate to deliver significant enhancement to shareholder value.'

Intu continued during 2017 with its asset recycling programme. Terms were agreed for the £148 mln disposal of 50% interest in Intu Chapelfield, following disposals of Intu Bromley and part of Intu Uxbridge in previous years.

The company also own three of Spain's top 10 shopping centres, and is planning to build a fourth. The jewel in the crown is the 153,000 m2 Xanadú centre in Madrid. Intu acquired the shopping centre from Canada's Ivanhoé Cambridge for €530 mln in March 2017. Two months later TH Real Estate acquired a 50% share in Xanadú from Intu for about €264 mln.