October 23, 2018 / 6:33 AM / 10 months ago

Intu cuts rental growth guidance

FILE PHOTO: The different levels of a new Debenhams department store are seen at Intu Properties' Watford shopping centre, Britain, September 24, 2018. REUTERS/Peter Nicholls/File Photo

(Reuters) - Shopping centre owner Intu Properties (INTUP.L) cut its full year like-for-like net rental income growth forecast on Tuesday, citing the impact of this year’s failure of a number of tenant businesses including House of Fraser.

The trading update follows a jump in shares last week when the company confirmed it was considering a 215 pence per share preliminary takeover offer from a consortium led by deputy chairman John Whittaker.

The company said it now expects net rental income to range from flat to growth of 1 percent for the full year, down from an expected range of between 1.5 percent and 2.5 percent growth announced in July.

Intu, which warned in April that it would be hit by administrations and restructurings initiated by tenants including New Look, Toys R Us and Prezzo, said it expected 2019 rental income growth to be around 1 percent.

It had estimated the impact of the tenant issues to be about 3.9 million pounds in 2018.

“Tenant administrations in the period, in particular the write-off of balances relating to House of Fraser and Coast, have resulted in a reduction from previous guidance,” Intu said, adding that 3 percent of their current rent roll is from tenants who have entered a CVA or administration process in 2018.

Reporting by Sangameswaran S in Bengaluru; editing by Patrick Graham

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