Intu Properties warns of difficult retail environment but remains positive

Intu Properties (until recently Capital Shopping Centres) has warned that the UK retail environment remains difficult and posted a one per cent decline in footfall in the year-to-date than in 2012.

However, it stressed that this is still an out-performance of Experian's measure of UK national retail footfall, which declined four per cent.

The group said the retail environment is under pressure, with retailers continuing to be cautious in entering into store commitments.

That said, occupancy levels have remained high at 95%, and reported that 33 new long term leases were signed during the first quarter, representing £8.0m of new passing rent.

David Fischel, Chief Executive, said: "In the first quarter of 2013 we have launched the first UK nationwide prime shopping centre brand, acquired a major asset with considerable growth potential funded by an equity placing and refinanced a third of our debt to achieve a significantly extended maturity profile.

"Although the UK retail environment remains difficult we have strong momentum across the business, with the roll out of our digitally integrated customer experience and our £1.0bn pipeline of development projects as we position each of our centres for medium term value creation."

At the end of March, the groups net external debt was unchanged at £3.5bn, and the debt to assets ration was 48%.

Looking ahead, the group said a range of initiatives is underway across the business, all of which are expected to strengthen its national position.

Despite this, it warned: "Tenant failures, lease expiries and tenant caution over new store commitments remain risk factors likely to continue to impact short term earnings. However, we are driving medium term value creation by using our focus, scale and specialism to maximise the opportunities available to us in the changing marketplace."

The share price edged 0.03% higher to 349.10p by 09:12 on Wednesday.

NR