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Shopping centre REIT Intu has unveiled plans to build an initial 1,000 rental homes, as it looks to diversify its assets away from the struggling retail sector.
Intu said it was going to build 1,000 build-to-rent homes at its Lakeside shopping centre in Essex. The homes will be built on the site of a House of Fraser department store which will be demolished, plus car parking space that is now deemed surplus to requirements, The Times reports.
Intu said in October that it had land available at its UK centres to build up to 5,000 rental homes and 600 hotel rooms. It will look for a joint venture partner to build and manage the homes.
Intu said Lakeside is 30 minutes away from Fenchurch Street station in the City of London, and said it will build homes to be rented by individuals, couples and families. Detailed plans will be unveiled at a public meeting Friday. As well as homes, the scheme will include public and open spaces and views of the eponymous lake.
“This new community will be the next phase of major development of our flagship locations,” Intu Development Director Martin Breeden said in a release.
Intu is joining the ranks of shopping centre owners looking to add residential and other uses to schemes in order to improve their value. Retail values are sinking fast as a steady stream of retailers close stores and demand rent cuts. Intu’s portfolio value fell by 13% to £9.2B in 2018.
Unibail-Rodamco-Westfield announced a joint venture earlier this year with Canadian investor QuadReal to build 1,000 rental homes at Westfield Stratford. Landsec is looking at the potential to turn its centres into mixed-use schemes, and Hammerson gave a glimpse of a scheme conceived under its City Quarters concept, where it talked a lot more about offices and homes than retail.
Intu’s share price has dropped almost 70% in the past 12 months, with two takeover offers ultimately aborted and investors worried about its high level of debt.
How did the stock market react to news that it wants to become the creator of mixed-use schemes? Its shares rose 0.3% to 78p.
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