Intu SGS - comment

Rent collections and Occupancy continue to improve across the portfolio with no signs that the recent macroeconomic uncertainty and the recent collapse of some high-profile retailers impacting.  In fact, occupancy is now at the same level as January 2021, when both Debenhams and John Lewis were still in occupation at Lakeside and Watford respectively.  Rent Collections for Q3 2023 currently stands at 90%, the highest level of collections achieved at this point in the quarter.  

The current valuation of the combined portfolio is £790m, a 2.5% increase on Dec 22 levels.  This is equivalent to 48.5% of face, versus 42-5 current levels. Yields have stayed broadly the same, c. 8.6%, with uplift coming from increasing rents.  But with transaction volumes for shopping centres minimal in Q2, after £250m across 12 centres were traded in Q1, there are no recent “test cases” to judge the accuracy of the valuations.  There are several large sale processes in the pipeline, however, it remains likely that volumes will remain low as sellers adopt a wait-and-see approach.