Intu Properties net rental income fall but seen levelling off

Intu Properties, the shopping centre owner, maintained its first-half dividend as it reported a flat net asset value and a fall in net rental income.

At 30 June, net assets stood at £4.99bn versus £4.98bn six months beforehand, with net asset value per share at 403p, down very slightly from 404p at the end of December.

Intu's like-for-like valuation surplus on investment property, including its share of joint ventures, was 0.2% at £20.3m in the period, behind the 0.6% of the sector as shown by the IPD monthly retail index.

Net rental income of £226.2m was up from £219.4m but underlying earnings subsided slightly to £98.5m from £99.5m.

LFL net rental income fell 1.5%, in line with recent guidance and against a strong comparative of +7.5%, including non-recurring items, in the first half of 2016.

Guidance for full year like-for-like net rental income is for a recovery to around 0%, though this is at the bottom end of the previously announced range of 0-2%.

"As previously stated, the precise outcome will be dependent on the timing of letting some of the larger units. These units, predominantly the former BHS units, are now all in advanced legals but closure of these transactions is slightly behind our original targets with longer term growth prospects undiminished."

Earnings per share were down 3% to 7.3p from 7.5p, with the half-time dividend kept at 4.6p, which was short of what some analysts and investors were hoping.

Intu said the ur LFL valuation surplus reflected improvements in retail and leisure mix along with the tightening supply of vacant units driving increases in expected future rental values.