Liberty Intl doubles provisions for failed retailers

By Sinead Cruise

LONDON (Reuters) - The UK's biggest shopping mall owner Liberty International Plc (LII.L) has more than doubled last year's provisions for tenant failures and has mothballed one of its key redevelopments as Britain hurtles towards recession.

The owner of Lakeside to the east of London and the MetroCentre in northeast England raised a contingency fund for bad debts to 10.2 million pounds ($16.1 million) from 4.5 million in September 2007 ahead of an inevitable crop of retailer bankruptcies in the New Year.

"We must recognise that consumer confidence is at all-time lows and there is a degree of nervousness among retailers about quarter four and the Christmas period," Liberty Chief Executive David Fischel told reporters in a conference call, covering the company's results for the nine months to Sept. 30.

"Clearly for us, the extent of retailer failures that emerge in the first quarter of 2009 will be a matter of considerable importance," he said.

Shares in Liberty, which also owns the Covent Garden estate in central London, were trading 1.6 percent down at 746 pence by 0948 GMT, lagging a 0.7 percent dip in the FTSE 350 Real Estate Index .FTNMX8730. The stock has fallen more than 30 percent in the last 12 months.

Fischel pledged to support tenants struggling to cope with the cooling economy with a "whole range of options" including payment plans and periodic turnover-based rents.

"Its a question of working with your retailers. Where you believe those difficulties are temporary, you will do what you can to make sure they maintain occupancy," he said, hinting Liberty could bow to demands to allow cash-strapped occupiers to pay rents monthly instead of quarterly.

DEVELOPMENT SLOWDOWN