Intu’s mall development plans keep tills ringing

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JSE’s largest real estate investment trust‚ Intu Properties‚ records 6% growth in earnings a share over the first six months of this year‚ pleasing the market.

The JSE’s largest real estate investment trust (Reit)‚ Intu Properties‚ recorded 6% growth in earnings a share over the first six months of this year‚ pleasing the market.

Intu owns some of the premium malls in the UK and Spain. The company’s current strategy is to acquire or develop more malls in major cities outside London and also to build a scale-able business in Spain.

Intu‚ which has a market capitalisation of R86bn‚ successfully refinanced its debt facilities‚ which supported earnings growth during the period. The Reit also realised a revaluation surplus‚ taking its total property value to £9.5bn.

“We were particularly encouraged by the continued improvement in retailer demand for quality space in pre-eminent destinations‚ with leases signed in the period in aggregate a healthy 12% above previous passing rent and we have a promising number of further lettings in the pipeline‚” CEO David Fischel said on Thursday.

He said retailers were taking more space in shopping centres where change and investment were under way.

“We attract over 400-million customer visits a year and aim to provide them with a great experience which encourages them to come more often‚ stay for longer and spend more with our retailers. Intu has the UK’s most digitally connected centres with an active online marketing database of over 2-million subscribers‚” Mr Fischel said.

Intu’s 10-year UK investment budget has risen to £1.5bn.

“We are on site with leisure and restaurant projects at five centres and expect to start the major retail and leisure extension at Intu Watford in the final quarter of 2015‚ turning the centre into a major north of London regional destination‚” he said.

In Spain‚ the group bought its second shopping centre during the reporting period‚ acquiring Puerto Venecia in Zaragoza. Intu then exercised its option on land owned near Malaga where the developer plans to begin construction next year on a major shopping resort to be called Intu Costa del Sol.

Anton de Goede‚ a portfolio manager at Coronation Fund Managers‚ the second-biggest shareholder in Intu with about 14.4% of its units‚ said the results met expectations and the group was set to provide strong earnings growth for years to come.

“Value extraction from an expanded development pipeline should start to deliver meaningful net asset value growth in 2016 into 2017 until 2022 as the pipeline is being executed‚” Mr de Goede said.


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