'Relief' as shopping centres survive
Friday 31 July 2009
Shopping centre owner Liberty International said today the number of its retail tenants going out of business had slowed and expressed "relief" at signs of stability - although not yet recovery.
The group, which owns a large part of the Covent Garden market area as well as Bristol's Cribbs Causeway, said business failures at its Capital Shopping Centres (CSC) regional sites had slowed from the "exceptional" rates seen at the end of 2008 and beginning of this year.
Liberty, which reported pre-tax losses had reduced by 1 per cent to £452 million for the half year to June 30, said resilient rental incomes and a deceleration in falling property values were signs of an improvement in the market.
Chief executive David Fischel said: "After a two-year period of exceptional turmoil, with the real estate downturn reaching its greatest intensity in the last quarter of 2008 and early months of 2009, we can, with some relief, report to shareholders welcome signs of at least a measure of stability, if not yet recovery, in property and economic market conditions."
Liberty said CSC's largest development, St David's in Cardiff, is on target to open in October, with around 125 new shops and restaurants being added to the existing site and making it one of the largest retail venues in the UK.
The firm said it was confident the enlarged shopping centre had a strong future, with the existing site already attracting 22 million visits each year.
"Cardiff is expected to rise to eighth place in the UK retail rankings on completion of the St David's development which has already attracted several new retailers to Wales," Liberty added.
It said retail in central London had held up well in the half year, with its Covent Garden estate 99% let and described as "trading well".
Footfall at CSC's centres has increased by over 3 per cent.
The UK regional business accounts for over 70 per cent of the group's total £6.1 billion portfolio.
While the group expressed some optimism for the future, it also stressed the scale of the downturn.
It said tenant failures amounting to over £30 million of CSC's rent in the last three quarters will "adversely impact" underlying earnings despite better re-letting activity.
In the last quarter of 2008 around 5% of CSC's tenants went into administration, followed by another 5 per cent in the first three months of this year.
"In terms of the tenant market we encountered an exceptional level of tenant failures in CSC's regional shopping centres in the last quarter of 2008 and first quarter of 2009 amounting in aggregate to over 10 per cent of CSC's rent roll," the firm said.
"The failure rate slowed down in the second quarter of 2009 and we have made steady re-letting progress."
Many of the lettings have been made on a short-term basis of less than five years. Liberty said this policy was made "at some cost in terms of rental levels", but added that the firm would benefit from the early expiries when the market recovered.
Occupancy has improved since March with the rate excluding tenants in administration increased from 95.4 per cent to 96.3 per cent at June 30 because of better re-letting activity and fewer retail failures in the second quarter.
Group net rental income dropped 2 per cent in the half year to £190 million, while tenant failures saw UK regional shopping centres 5 per cent below 2008 on a like-for-like basis.
Liberty said the fall in property values reduced to 4.3 per cent from 8.5 per cent in the first quarter amounting to 12.4 per cent overall.
The property investment market even began to strengthen in certain sectors, which allowed the firm to offload some of its smaller assets worth £187 million, which were deemed non-core to the business.
Harry Potter actor suffered 'severe flu-like symptoms' on a flight from London to Orlando
Rap music mogul accused of running two men over in his truck
First full-length look is finally here
The party's potential nominations read like a high school race for student body president
- 1 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 2 The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 Baldness could soon be treated using stem cells, scientists hope
Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
Mia Khalifa: Pornhub star claims Drake sent her 'cringeworthy' naked photos on Instagram
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...