Johannesburg - Intu ended the first half of the year with a gain in the market value and in rental income, the company told shareholders today.
In the six months to June, net rental income grew to 207.6 million pounds, or R4 billion, from 189.2 million pounds a year ago. In the same period, the market value of its investment properties leapt from 8.96 million pounds to 9.5 million pounds, giving it a value of about R186 billion thanks to a revaluation surplus.
CEO David Fischel says the company recorded a strong first half with 6 per cent growth in underlying earnings per share.
“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 per cent above previous passing rent and we have a promising number of further lettings in the pipeline.”
Intu Properties, which was previously known as Capital Shopping Centres Group, is a British Real Estate Investment Trust, largely focused on shopping centre management and development.
The company began life in the UK in 1980 as the fledgling international arm of Liberty Life Association of Africa, the South African financial services company founded by Donald Gordon in 1958, but important parts of its business have been inherited from its previous subsidiary company, Capital & Counties, which was incorporated in the UK in 1933.
It is now an independent FTSE 100 property company, listed in London and Johannesburg.
In its interim results, it says retailers are responding positively to taking space in centres where change and investment are underway.
“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 two million subscribers,” it boasts.
The company adds its ten-year UK investment programme has risen to 1.5 billion pounds, or R30 billion.
Intu adds it is on site with leisure and restaurant projects at five separate centres and expect to start the major retail and leisure extension at intu Watford in the final quarter of 2015.
The company notes it continues to “seize the significant opportunity we see in Spain to create a quality business of scale in an attractive market”.
Earlier this year, it bought its second top 10 centre – Puerto Venecia in Zaragoza – and exercised its option on land near Malaga where it expects to begin construction next year on a major shopping resort to be called intu Costa del Sol.
“We are now clearly seeing the benefits of our strategy of the last few years, combining selective quality acquisitions, a focus on tenant mix, improved customer experience, both on and offline, and continuing investment in our existing centres. As previously guided, we remain on track to return to a positive like-for-like rental performance for the full year and are well positioned to deliver a more meaningful uplift in 2016."
IOL