Big four shopping centre landlords face 'long-term risk' from CVAs

brentx sc n82

One fifth of shopping centre floorspace being let by the four biggest real estate investment trusts is to retailers in administration or with shrinking sales, according to new analysis by UBS.

Analysing data from 50 shopping centres owned by British Land, Landsec, Hammerson and Intu, UBS found 20% of total shopping centre floorspace is occupied by retailers already carrying out a CVA, in administration or suffering from declining sales growth.

UBS said this impact was “significantly higher than the companies’ reported rent impacted by CVAs, which ranges from 2.7% to 4.4% of rental income”.

The investment bank said this posed “long-term risks to the retail REITs, including lower rental growth prospects and higher vacancy” and could lead to a “vicious circle” of store closures, leading to “less pleasant” shopping experiences and further reduced foot traffic.

Subscription content

Please sign in now if you have a subscription

Retail Week

Register to continue reading

Retail-Week.com provides premium, in-depth intelligence that helps retailers judge risks, spot opportunities and identify what they need to do to win in the digital economy.

Register today for a taste of our high-quality intelligence and enjoy:

  • 3 free articles a month on Retail-Week.com
  • Detailed analysis of current trends and events 
  • Exclusive newsletters
  • In-depth reports, videos, interviews and much more

Discover Retail Week register now

Please note, if you have recently purchased a subscription, it may take a few minutes before your account is updated.