Intu Properties raises full year guidance as first half earnings rise

Property management company Intu Properties on Thursday raised its full year guidance for rental income growth as it reported an increase in first half underlying earnings.

Underlying earnings rose 12% to £99.5m in the six months ended 30 June 2016 from £88.7 the same period a year earlier. The growth was driven by a 5.6% increase in net rental income to £219.4m from £207.6m.

“We have therefore raised our guidance for full year like-for-like net rental income growth to 3 to 4%,” said chief executive David Fischel.

Fischel said in the first half the company enjoyed healthy letting activity, leading to an improved occupancy ratio of 96.1% from 95.1% the prior year.

During the period, the group signed 98 long-term leases, including 82 in the UK and 16 in Spain, for £17m new annual rent at an average 7%above previous passing rent and in line with valuers' assumptions.

“Our established retailers, such as Zara and Next, have been upsizing space and we have welcomed new lifestyle brands and international retailers at a time when the supply of quality retail space is limited,” said Fischel.

“We continue to focus on strengthening and improving our prime regional shopping centres, introducing new leisure concepts and increasing the dwell time of our 400 million customer visits per year.”

The company left its dividend unchanged at 4.6p.

On the UK’s European Union referendum on 23 June, the company said it was too soon to tell the full consequences Brexit would have on business but the “likelihood of macro-economic weakness has increased”.

“However, since 23 June 2016, our footfall has been in line with the first six months and we have continued to engage with tenants on new space and sign leases, exchanging 27 leases.”