Intu - in-depth by silo

All,

Please find our updated analysis of Intu here.

Intu is in fact not a levered bet on retail. It’s the leverage. Thus even if the trend is the same, it is less volatile and Intu’s shopping centres benefit from a positive trend within retail towards such large venues. Clearly there is the coronavirus issue as well as the many troubles befalling retail in the UK and elsewhere. But even when dropping rental income further going forward, we think the 8-10% usual distressed cap-rates we have heard mentioned in the market do not apply in this rate environment. The centres are well invested and even when discounting their value further provide excellent security for the most part.

Overall there is marginal room to restructure the company (incl. debt/equity swap most likely), although aside from the obvious market roller-coaster - we are yet to decide on any tactical positioning. 

The company is expected to release financials shortly, which we hope should answer some of the outstanding cash-flow questions. 

Wolfgang