Intu Properties hailed a “strong” first quarter on Tuesday, with a record level of retailer demand, but it made no mention of its deal with Hammerson, which could be at risk.
In a trading update for the period from 1 January to 17 April, the company said it agreed 60 long-term leases for £10m of annual rent, which is 5% higher than the previous passing rent.
In addition, it sustained high occupancy of 91.6%, while footfall increased year-to-date by 1.5%, excluding the period of snow, as it continued to outperform the UK benchmark
Intu continues to expect growth in like-for-like net rental income for the year to be in the range of 1.5% to 2.5%, with the outcome expected to be stronger in the second half than the first.
The company's £180m Intu Watford extension is on target to open in October and the group said it has cash and available facilities of £872m.
Chief executive David Fischel said: “We continue to see growth opportunities for our £10 billion UK portfolio. We have a substantial ongoing investment programme that will see us open our £180m extension at Intu Watford later this year and the £72m leisure extension at Intu Lakeside next year, with lettings proceeding strongly in both cases. We are also planning to invest over £560m in our UK centres over the next three years.
“Our well-timed entry into the Spanish market continues to offer significant upside as the country's economic recovery continues, both from the three top-10 centres we currently own and from our plan to begin construction in the next 12 months of a £600m world class retail resort near Malaga.”
Intu made no mention of its proposed £3.4bn takeover by Hammerson, the fate of which is hanging in the balance after it emerged last Friday that the housebuilder's largest shareholder, Dutch pension fund manager APG Asset Management, plans to vote against the deal.
Numis said the trading update feels like “a defensive statement that is laying the groundwork to prepare investors should Hammerson's bid for Intu be pulled”.
“Intu is not in an easy position and should Hammerson walk away, we believe the shares will come under sustained pressure as the market's focus moves onto the potential ramifications of Intu's high peak cycle leverage. The shares may trade on -46% versus spot NAV and yield 6.5%, but we see limited value on a stand-alone basis,” Numis said.
At 0910 BST, Intu shares were up 0.4% to 208.70p.