INTU Metrocentre and INTU Trafford Centre initiation

All,

Today we have initiated on INTU Metrocentre here and INTU Trafford Centre here.

Although significant time and effort is placed on short term assumptions surrounding rent collections and vacancies over the coming 6-12 months, it is important to realise that the security valuation, i.e. the centre valuation, is primarily influenced by long-term assumptions and discount rates.  Depending on the structure, the short term liquidity concerns can be alleviated by various liquidity facilities at individual structures.  The value of the asset, and in turn the value of the bond, is determined by the medium term assumptions in relation to occupancy rates and rental income. 

Therefore, there will be a polarisation of the shopping centres in the UK between regional shopping centres which enjoy higher footfall and larger retail spaces to accommodate "destination shopping" versus city centre shopping centres.  Both Trafford Centre and Metrocentre enjoy excellent transport links and road connections, with significant catchment areas.  

We are not taking a position currently in either bonds but are actively debating it.

Please feel free to call to discuss.


Tomas