Intu taps shareholders to fund UK mall deal

LONDON Wed Feb 27, 2013 10:24am GMT

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LONDON (Reuters) - British mall owner Intu Properties plans to raise cash from shareholders to fund a 250.5-million-pound purchase of a shopping centre.

The company, which reported flat earnings as Britain's retail sector battles weak consumer confidence, is betting on the relative resilience of larger shopping malls as they tend to attract more shoppers.

Intu will place up to 86 million shares, which represents 9.9 percent of its share capital, which will be used to buy the Midsummer Place shopping centre in Milton Keynes, southern England.

The company's shares were down 2.3 percent at 335 pence at 1021 GMT after news of the fourth equity placing since 2009 and the announcement of its 2012 results.

"The shares are off because the dividend is flat for the fourth year running, NAV is up a penny but they've asked for more money to buy a shopping centre, an asset class that is going sideways at best," said Investec analyst Alan Carter.

The net asset value of the company's real estate was up 1 pence at 392p per share at the end of December from a year earlier. The dividend was flat at 15 pence and the occupancy level was 96 percent versus 97 percent in 2011.

A series of retailers including Jessops, HMV and Comet have failed as shoppers tighten their belts under austerity measures, which has left a swathe of Britain's high streets and shopping centres with empty lots.

Larger malls that dominate their catchment area have performed relatively better than others despite the weak state of Britain's economy and Intu's properties include some of the country's largest centres, such as the Trafford Centre in Manchester and Lakeside in Essex, southern England.

But owners of larger centres including Land Securities and British Land face stiff competition from the internet as growing numbers shop online.

Ninety percent of retail sales growth in the UK, France and Germany between 2012 and 2016, or 91.5 billion euros ($119.6 billion) will be online, said the property arm of French insurer AXA this month, which manages 43 billion euros ($57.41 billion) of assets.

Last month Intu announced it was changing its name from Capital Shopping Centres as part of a 25-million-pound revamp that included renaming its malls and boosting its online presence.

(Reporting by Tom Bill; Editing by Louise Heavens)

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