Intu Properties to buy two UK malls and retail park for R16bn

Posted On Monday, 24 March 2014 13:26 Published by eProp Commercial Property News
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Intu says it will buy two regional malls and a retail park in the UK for R16bn from Australian shopping centre giant Westfield.

 David Fischel

Intu Properties (ITU)‚ the JSE-listed owner of some of the UK's largest malls‚ said on Thursday it would buy two regional malls and a retail park in the UK for a total R15.7bn‚ from Australian shopping centre giant Westfield.

The massive deal would give Intu access to Birmingham‚ England's second-biggest city where it has never had exposure before‚ and let it cement its position in Derby‚ England‚ and Northern Ireland.

An improving UK economy driven by consumer spending has boosted performance of Intu's malls and placed it in the position to make the acquisitions.

The deal was worth more than South African prime retail asset the V&A Waterfront at current exchange rates. The latter was recently valued at just over R11bn by joint owners Growthpoint Properties and the Public Investment Corporation.

Intu is dual-listed on the JSE and London Stock Exchange. The stock has underperformed some of its JSE-listed offshore peers in terms of total returns over the past two years but a slow and tentative recovery in UK consumer spending has seemingly sparked renewed investor appetite for the UK mall owner's scrip in recent months.

The share price is up about 12% in the past six months. In terms of the deal announced last week‚ Intu said it had agreed with Westfield to acquire Westfield's 50% and certain joint venture partners' 50% interest in Westfield Merry Hill shopping centre.

It also agreed with Westfield and certain joint venture partners to acquire the 100% interest in the Westfield Derby shopping centre. Finally‚ it would obtain Westfield's 100% interest in Sprucefield retail park.

Merry Hill is a super-regional prime shopping centre in the West Midlands‚ 16km west of Birmingham. It covers 1.4-million square feet‚ spread over two retail levels with 214 shop units‚ and a further 0.3-million square feet of adjacent retail space. It attracts about 25-million customer visits each year.

Westfield Derby is an enclosed town centre shopping centre comprising 1.3-million square feet with more than 180 shop units over two levels.

It attracts about 25-million customer visits a year. Sprucefield is a retail park in Northern Ireland‚ originally developed in 2003. It comprises five retail units and has a total floor area of 230‚000 square feet.

CE David Fischel said on Friday the deal allowed Intu to continue to focus on the most successful UK sites for retailers.

"It is an attractive opportunity to acquire a further two prime shopping centres in line with our strategy to focus on the UK's most successful destinations‚" he said.

Last modified on Thursday, 17 April 2014 15:46
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