Johannesburg - Listed intu Properties is forging ahead with its shopping centre development programme in the UK and Spain.
However, chief executive David Fischel believes the company still had the ability to take advantage of acquisition and other opportunities that arose. intu Properties, which owns nine of the top 20 super regional centres in the UK, has a development programme plan that extends to 2020.
It includes a UK investment pipeline of £1.5 billion (R29.65bn) over the next 10 years to add 241 548m² of new retail and leisure space.
Major projects due to commence soon include the extension and refurbishment at intu Watford and the leisure expansion at intu Lakeside. intu Properties also has a growing presence in the Spanish market, where it has a £463 million development pipeline.
It owns two of Spain’s top 10 centres, intu Asturias in Oviedo and Puerto Venecia in Zaragoza, has a development site near Malaga and development options on a further three sites in Valencia, Palma and Vigo.
Worthwhile deals
Fischel stressed last week the primary focus of the company now was on the development programme, but it had always found a way in the past in doing deals that were worthwhile. The company had £500 million in headroom at the moment and had the ability once it had done a development to refinance it and use the proceeds.
Fischel referred to their intu Uxbridge, where last year it brought in an investor that took an 80 percent stake in the centre.
“We can do another deal like that to create more capital. But the general approach is that we take on organic growth in developments and extension and work on a self-help basis and finance them ourselves. That is what our shareholders expect,” he said.
Fischel said the majority of the remaining top 10 shopping centres in Spain were in Madrid and Barcelona, which were very congested markets that it would not focus on for now. “Our strategy for now in Spain is development led. If we build (the opportunities that) we have created, we will have a very valuable business,” he said.
Growth
intu Properties, previously known as Capital Shopping Centres Group, on Thursday reported a 6 percent growth in underlying earnings a share to 6.8p in the six months to June from 6.4p in the previous corresponding period.
It also reported a 1.9 percent growth or £162m revaluation surplus, increasing the company’s total property value to £9.5bn.
Net rental income rose almost 10 percent to £207.6m from £189.2m.
An unchanged dividend of 4.6p was declared.
Fischel said they were particularly encouraged by the continued improvement in retailer demand for quality space in pre-eminent destinations, with leases signed in the period in total a healthy 12 percent above previous numbers.
Online retailers were also seeing the benefit and need for a physical presence and appeared to have concluded that they could “work hand-in-hand and feed into each other”, he said.
Shares in intu Properties rose 0.68 percent to close at R64.96 on the JSE on Friday.
BUSINESS REPORT