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Glimpse Into £744M Former Intu Portfolio Shows Fortunes Improving

Intu's Lakeside shopping centre in Essex

A portfolio of four shopping centres previously owned by collapsed retail giant Intu saw improved performance in 2021 under new management. 

The SGS portfolio comprises the Lakeside centre in Essex, the Braehead centre in Glasgow, the Atria centre in Watford and the Victoria centre in Nottingham.

The schemes have £1.3B of debt secured against them, provided by a group of banks including Bank of America Merrill Lynch, UBS and HSBC. The centres are essentially owned by the lenders, with the asset management being undertaken by Global Mutual.

The value of the centres is still far below the level of the debt. But the December figure of £744M represents a 5% uplift on the same point in 2020.

That is partly down to the recovering market, but partly attributable to improved income performance at the centres, an update on the business plan provided to lenders showed this week.

The lenders collected £96M of rent in 2021, up from £92M in 2020 when not all rent was actually collected. 

The report said 93% of its rent was collected at the end of Q4 2021, compared to 74% at the end of the third quarter and just 41% at the end of Q4 2020. 

The report said that rents had been rebased to make them more affordable, and occupancy had improved to 85%, compared to 82% at the half-year. 

Part of the policy of rebasing rents had been to offer more turnover rents to retailers, and 17% of the portfolio’s rents are now on a turnover basis, according to the report. During 2021, 46 new leases and 88 lease regears were completed, accounting for 14% of the portfolio’s turnover, with another 79 in the pipeline, including talks to re-let space that had been vacated by John Lewis in Watford. 

All of this meant the portfolio had £48M more in cash from rent than anticipated at the start of the year.

In spite of this, there is no plan to sell the centres just yet, the report indicated. The shopping centre investment market has improved but remains shaky, the report said, and the portfolio is unlikely to be sold before the end of 2023.