'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
News
people

Harry Potter actor suffered 'severe flu-like symptoms' on a flight from London to Orlando

Sport
Kim Sears is reported to have directed abuse at Berdych
tennis
News
news

Rap music mogul accused of running two men over in his truck

News
Gywneth Paltrow proposed that women seek out a special herbal steam-treatment service
news
PROMOTED VIDEO
Arts and Entertainment
film
Arts and Entertainment
tv

First full-length look is finally here

Voices
A mother and her child
voices
Life and Style
life
Arts and Entertainment
Film director Martin Scorsese
film
News
news

The party's potential nominations read like a high school race for student body president

Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee