Intu’s chief financial officer Matthew Roberts has said the property giant will be looking to intensifying its residential and hotel offerings to offset declining retail footfall.
Roberts said that the retail property giant, which recorded a 1.6% fall in footfall across its shopping centre portfolio in the 52 weeks to December 31 2018, would consider build more residential units and hotels to bolster its portfolio.
“One of the ways we’re adapting to a changing retail environment is through intensification,” he said.
”So, we’re already building blocks of flats at our Lakeside centre. We’ve also built hotels and the like. We’ve just finished building a Travelodge Hotel, also at our Lakeside centre. That’s already fully booked, and they want more space and there’s scope for at least one more there.”
Intu has 470 acres of surplus land across its portfolio, with the potential to develop as many as 5,000 residential units and as many as 600 hotel rooms.
Roberts also said that Intu would look to “change the use of space” in some centres to give more tradeable space over to leisure offerings.
“We’ve just opened an extension to our Watford centre, where we put in a big cinema and sports area; golf, bowling and climbing,” he says.
”We also announced yesterday that we’d signed a lease with Market Halls – a communal eating area. That will give people another reason to visit our centres and the tenants will benefit from that extra footfall.”
Intu would also be looking to “do more deals with global, international retail brands than we were two or three years ago” – pointing to Zara parent company Inditex and Swedish fashion giant H&M.
“What do you as a tenant want from a shop? You want as many people as possible to walk past your store and typically you want to be alongside your best peers. It’s also about putting in the right food and beverage offering,” says Roberts.
Roberts also confirmed that Intu is looking to offload its Spanish shopping centres. Intu finished 2018 with a debt to value ratio of 53%, which it is trying to get down.
“One way we’re going to get our debt ratio down is by disposing of centres,” he says.
”The UK market is not that easy at the moment, and we’ve got a good Spanish market. We’ve had a number of approaches on our Spanish businesses over the last few weeks.
“We’re evaluating those, and we want to crack on with our disposal programme as that will allow us to bring the debt to value down.”