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Beleaguered shopping centre owner Intu made a loss of £2bn in the year to 31 December 2019.

The owner of Manchester's Trafford Centre and Lakeside at Thurrock, Essex blamed the loss mainly on a 23% fall in property values over the year.

Earlier this year the company approached its shareholders to ask for more money amid a downturn in the retail sector, before abandoning the emergency fund raising because "extreme market conditions" deterred investors from giving fresh cash.

In Thursday's results statement it said: "Our results are evidence of the challenges in our market, in particular structural changes ongoing in the retail sector, with some weaker retailers struggling to remain relevant in a multi-channel environment. This has led to a higher level of administrations and CVAs and has been exacerbated by the continued weak consumer confidence from the political and economic uncertainty in the UK," it said.

As a result, the company's revenue fell by 9.1% in 2019, with more than half the change coming from Company Voluntary Arrangement (CVA) and administration processes.

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3 hours ago, Si1 said:

Contagion from the CV 19 crash. All those local councils balls deep in commercial property.

This is before Covid-19 had any economic impact in the UK.

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Yes indeed, its not going to end well for these councils meddling in retail that they know nothing about. Who is going to bail them out then?? Serious questions need to be asked, the mainstream media have not even challenged this policy just reported it as good for the local area etc

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  • 2 weeks later...

Article in today's ft

https://www.ft.com/content/00260ce6-6d1f-11ea-89df-41bea055720b?segmentid=acee4131-99c2-09d3-a635-873e61754ec6

One property investor with a portfolio of shopping centres across the UK said he expected only 30 to 60 per cent of tenants to pay their rent on Wednesday and that many landlords had been stalling negotiations, hoping the government would intervene. 

... 

Robbie Duncan, an analyst at Numis, warned: “If we go for two quarters with no rent, the real estate sector is going to need a bailout. While retailers have been the worst hit, all commercial tenants — and their landlords in turn — would be squeezed.”

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  • 3 weeks later...
Quote

 

Struggling retail landlords watch rents dry up in the pandemic

...The most recent payday, the second-quarter payment date of 25 March, was a far from harmonious occasion, however. Hammerson, owner of malls such as Birmingham’s Bullring and Brent Cross in London, said it had only received 37% of the rent due for the second quarter. Its competitor Intu Properties, which owns the Trafford Centre in Manchester, received just 29% of second-quarter rents on the due date.

...Some £2.5bn in retail rents was due at the end of March, according to trade body the British Property Federation (BPF). The property industry, it says, cannot absorb vast losses, because landlords have debts to service.

...A number of landlords, however, have called for their lawyers and are threatening immediate legal action. Intu, which has a £4.5bn debt pile and is fighting for survival, has already threatened some tenants with a statutory demand – a formal request for payment – if they do not pay.

An Intu spokesperson said: “We are happy to engage with brand customers on a case-by-case basis, but we have neither the desire or financial capacity to bankroll global, well-capitalised brands who have just decided they don’t want to pay their rent.”

https://www.theguardian.com/business/2020/apr/11/retail-landlords-struggling-rents-dry-up-pandemic

 

 

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On 24/03/2020 at 07:26, regprentice said:

Article in today's ft

https://www.ft.com/content/00260ce6-6d1f-11ea-89df-41bea055720b?segmentid=acee4131-99c2-09d3-a635-873e61754ec6

One property investor with a portfolio of shopping centres across the UK said he expected only 30 to 60 per cent of tenants to pay their rent on Wednesday and that many landlords had been stalling negotiations, hoping the government would intervene. 

... 

Robbie Duncan, an analyst at Numis, warned: “If we go for two quarters with no rent, the real estate sector is going to need a bailout. While retailers have been the worst hit, all commercial tenants — and their landlords in turn — would be squeezed.”

Are all the shopping centres going to disappear, like the houses when BTLrs go bust?

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8 minutes ago, Si1 said:

Are all the shopping centres going to disappear, like the houses when BTLrs go bust?

The head of lettings at Knight Frank is predicting house prices falls in London of only 3% in 2020 and rents will be unchanged in the Telegraph today. You really should listen to the experts like him to know what is really going on!

Am wondering how many rental payments won't be made this month by private renters in London who are self employed or out of work and have no money coming in.

Edited by MARTINX9
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On 12/03/2020 at 13:59, Social Justice League said:

intu have been finished for a while.

A £2 billion loss is hilariously bad.

Truly impressive! 

But the senior management team are so worth it!

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On 11/04/2020 at 17:56, Si1 said:

Are all the shopping centres going to disappear, like the houses when BTLrs go bust?

No, but they won't be open; as the net income will turn negative (empty rates, insurance, service charge).. Once you go below a certain occupation point (say 60%, but varies on the rental levels) these things are in a terminal spiral.

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Intu owns (at least Intu branded) the MetroCentre in Gateshead (across the river from Newcastle upon Tyne ) and Eldon square in Newcastle upon Tyne. The MetroCentre had quite a few boarded up shops even before this. 

 

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1 hour ago, Snafu said:

Intu owns (at least Intu branded) the MetroCentre in Gateshead (across the river from Newcastle upon Tyne ) and Eldon square in Newcastle upon Tyne. The MetroCentre had quite a few boarded up shops even before this. 

 

People go on about the MetroCentre being this great shopping place, I went there once, very unimpressive. Whole place looked very dated. Milton Keynes it is not. Best shopping centre in the country

Edited by bear.getting.old
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1 hour ago, bear.getting.old said:

People go on about the MetroCentre being this great shopping place, I went there once, very unimpressive. Whole place looked very dated. Milton Keynes it is not. Best shopping centre in the country

Indeed nothing special. I got lost in it the first five years after I moved here.

It is however the main shopping centre around here that you can easily drive to. If it were not close it would improve the traffic situation on the A1! Not saying it will close of course.

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On 12/03/2020 at 13:59, Social Justice League said:

intu have been finished for a while.

A £2 billion loss is hilariously bad.

 

6 hours ago, interestrateripoff said:

Paper profits?

Mark to market Enron style re-valuing the properties ever higher each year.  many stock market propco's have most of their profit from revaluation gains rather than rent. 

 

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Trafford centre has still been opening for just 4 small retailers -M&S food, Holland & Barrett(!) Superdrug, Boots.

In fact, now Boots & Superdrug are only opening 3 days a week - So a huge shopping centre is opening six days a week just for 2 small shops. Is it even worth paying for the lighting?

 

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On 24/03/2020 at 07:26, regprentice said:

Article in today's ft

https://www.ft.com/content/00260ce6-6d1f-11ea-89df-41bea055720b?segmentid=acee4131-99c2-09d3-a635-873e61754ec6

One property investor with a portfolio of shopping centres across the UK said he expected only 30 to 60 per cent of tenants to pay their rent on Wednesday and that many landlords had been stalling negotiations, hoping the government would intervene. 

... 

Robbie Duncan, an analyst at Numis, warned: “If we go for two quarters with no rent, the real estate sector is going to need a bailout. While retailers have been the worst hit, all commercial tenants — and their landlords in turn — would be squeezed.”

Why would they need a bail out? Capitalism says they should go bust and new players buy the assets for a discount in line with the future discounted rents.   It is debt and exec ( we deserve it) wages that creates the situation whereby they can't go a few months without rent followed by much lower rents going forward.

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10 hours ago, Council estate capitalist said:

 

Mark to market Enron style re-valuing the properties ever higher each year.  many stock market propco's have most of their profit from revaluation gains rather than rent. 

 

The whole concept of business  has become a dogs dinner of financial engineering and crony capitalism and deserves a big whack. Virus is the worst best answer to the issue. 

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22 minutes ago, steve99 said:

Why would they need a bail out?

Language is like magic and these people are attempting to cast a spell on you with it.

When they say:

23 minutes ago, steve99 said:

If we go for two quarters with no rent, the real estate sector is going to need a bailout.

What they mean is, "Our business model has 2 quarter's worth of slack (lie- it probably has a month's worth of slack). It will be bankrupt after this and will be forced to liquidate. If you don't want forced liquidations and concomitant asset repricing, you better slide us some of that sweet taxpayer dollar."

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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