Chief operating officer Mike Butterworth said on Tuesday there were indications that “confidence is coming back” among UK retailers.
Intu, which owns 10 of the UK’s top 25 shopping centres and has a South African shareholding of about 30%, has been undertaking a substantial rebranding and repositioning exercise.
The company, which is the largest listed real estate investment trust (Reit) on the JSE and is also listed in London, recently changed its name from Capital Shopping Centres, and introduced a nationwide consumer-facing shopping centre brand, “Intu”.
It has also introduced a single transactional website for its centres, and is in the process of rolling out free Wi-Fi in its malls.
Mr Butterworth said while retailers remained cautious and it had been difficult to drive rentals, the company had avoided temporary lettings, instead focusing on a number of strategic lettings with “key retailers”, some of which were taking larger spaces.
The outlook for the retail sector was now more positive, he said.
Intu was also introducing catering and leisure components into its malls, and was repositioning its centres in preparation for improvements in the economy. “A lot of the groundwork has been, and is being, done,” Mr Butterworth said.
According to research by Barclays Capital released last month, UK retail sales volumes grew faster than expected in July, with total sales growing 1.1% month on month. This brought the year-on-year growth rate to 3%, the highest since January 2011. Retail sales values had grown ahead of sales volumes since the onset of the economic crisis, showing “the extent to which high inflation in the UK has damaged consumer purchasing power”, said Barclays Capital economist Blerina Uruçi.
However, retail spending “has improved steadily in recent months”, adding to “generally positive news on the UK economy recently” and consistent with the pick-up in consumer confidence, Ms Uruçi said.
Intu finance director Matthew Roberts said the rebranding “has gone really well”, with the physical rebranding exercise almost complete. The transactional website had been operational for about six weeks. About 60 retailers were represented on the site, although this number was expected to grow, he said.
Last month, Intu reported an unchanged 5p interim dividend per share for the six months ended June, and a 2.9% drop in like-for-like net rental income — as positive rental growth was offset by the effect of tenant failures.
Earlier this year, the company acquired Midsummer Place in Milton Keynes, as well as Charter Place in Watford. Kagiso Asset Management analyst Justin Floor said in August Intu’s holding of mostly highquality centres, which had “healthier vacancies and shopper footfall characteristics than the average market”, would set the company up well for an improvement in the UK market.
