UK Mall Owner Intu Sees Only 29% Q2 Rent Collection Amid Crisis
- Intu receives only 29% of rent for Q2 due from tenants
- All Intu centres in UK and Spain operating on semi-closed basis
- Reduced capital expenditure and head office costs to preserve cash
- Initiated program to reduce non-essential service charge costs
- Ongoing dialogue with UK government for support package access
- Expected covenant waivers from lenders due to reduced rents
- Uncertainty around COVID-19 impacts future guidance
Intu Properties, the owner of major UK shopping centers like Trafford Centre in Manchester and Lakeside in Essex, has revealed that it received only 29% of its second-quarter rent due from tenants on March 25th. This is a significant drop compared to the same period last year when it collected 77%. The company is now discussing with customers about the outstanding rents amid the rapidly evolving coronavirus pandemic. All Intu centers in the UK and Spain are operating on a semi-closed basis, with only essential stores like supermarkets, pharmacies, and banks remaining open. To preserve cash within the business, the group has reduced capital expenditure for the foreseeable future and cut back on head office costs. It has also initiated a program to reduce non-essential service charge costs. Intu is in talks with the UK government about accessing its £330bn support package and expects measures like business rates suspension, employee cost support, and tax payment deferrals to have a positive impact. The company stated that reduced social activity will likely continue, affecting footfall and potential future rents. Intu is also seeking covenant waivers from lenders due to the impact of reduced rents and is assessing strategic alternatives while providing updates as needed.
Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Intu’s financial situation during the pandemic, including details on rent collection, operational changes, cost-cutting measures, and discussions with lenders and the government.
Noise Level: 3
Noise Justification: The article provides relevant information about the impact of the pandemic on a specific industry (retail) and the measures taken by a company (Intu) to cope with the situation. It does not contain irrelevant or misleading information, but it is mostly focused on reporting facts without in-depth analysis or exploration of long-term trends or consequences.
Financial Relevance: Yes
Financial Markets Impacted: Intu’s tenants, UK and Spanish retail real estate market
Financial Rating Justification: The article discusses Intu’s reduced rent collection due to the COVID-19 pandemic, its cost-cutting measures, and ongoing discussions with lenders and the government, which impacts financial markets related to the retail real estate sector.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: The article discusses the impact of the COVID-19 pandemic on Intu’s rental income and operations, but it does not mention an extreme event in the last 48 hours. The situation is considered minor due to the focus on reduced rents and operational changes rather than significant deaths, injuries, or damage.
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