'Relief' as shopping centres survive

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.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
sportSo, how closely were you paying attention during 2014?
Arts and Entertainment
Dennis speaks to his French teacher
tvThe Boy in the Dress, TV review
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Alexis Sanchez missed a penalty before scoring the opening goal with a header at the back post
footballArsenal vs QPR match report
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Rooney celebrates with striker-partner Radamel Falcao after the pair combine to put United ahead
footballManchester United vs Newcastle match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all