UK and Spain shopping mall owner intu Properties has agreed on the sale of three properties for a total of £25.3 million, as part of its current disposal and capital recycling programme.
One of the properties to be sold is a freehold investment in Brierley Hill in West Midlands, with a gross internal area of 75,186 sq ft on a total site area of 5.0 acres, located near its Merry Hill shopping centre.
Another is intu's freehold and leasehold interests in York House, a 24,000 sq ft site adjacent to intu Victoria Centre in Nottingham and the third property to be sold is the former BHS store on St Peter's Street, Derby which consists of four levels comprising 53,000 sq ft.
Proceeds from the disposals will be reinvested into intu's ongoing pipeline of development opportunities across its UK shopping centre portfolio.
On Thursday last week, intu was left reeling after a consortium of shareholders announced it would not be making a formal £2.85 billion offer amid ongoing market uncertainty. In October, a consortium comprising shareholders Peel Group and Olayan Group - which together hold a 30% stake in intu - and US-based Brookfield Property Group had proposed a cash proposal of 215 pence per share.
On Thursday, the stock closed 41% lower in London.
Chief Executive David Fischel said on Friday: “These three deals, all successfully sold at above book value, are further evidence of our commitment to dispose of non-core assets and recycle capital into our exciting development programme. All three sites will continue to benefit from being in the vicinity of hugely popular intu shopping centres which welcome millions of shoppers every year.”
RPA Perspective A bidding consortium made up of the intu shareholder Peel Group, Saudi Arabia’s Olayan Group, which together already own just 30% of Intu, together with the Canadian firm Brookfield Property had tabled a 210.4p per share offer.
But the consortium surprised the market when it said it was not able to go ahead with an offer within the timetable allowed under the regulator Takeover Panel’s rules, which would have meant confirming a deal on Friday, amid “uncertainty around current macroeconomic conditions and the potential near-term volatility across markets”.
David Fischel, the chief executive of Intu, insisted: “There is only one reason this deal was called off and that was Brexit…In the last couple of weeks for Brookfield, as an outsider looking in, how can they make a real decision about investing in the UK right now and weigh up the risks?”
He said the consortium had been ready to move ahead with the deal until Theresa May’s Brexit plan was unveiled last week and “all hell broke loose”.
He added: “Inward investment into the UK until things have stabilised is going to be very difficult.”
News of the bid collapse comes as under-pressure retail property values face the threat of further writedowns. Intu property values have fallen nearly 10% this year alone.
Shares in Intu dived by 40% to 114.5p on the announcement, wiping £1bn from the value of the company, while shares in fellow shopping centre owners Hammerson and Land Securities also took a hit amid fears for the wider industry.
Intu also warned it would cut its dividend payments to shareholders because of the uncertainty in the market and difficulty in offloading assets.
John Whittaker, chair of the investment firm Peel, said: “We remain fully committed to Intu as a long-term, strategic shareholder. Intu’s portfolio of super regional and prime city centre shopping centres is trading strongly.”
Intu is also looking at alternative uses for spare land, including unused car parks, including a potential 5,000 homes, 600 hotel rooms and flexible working spaces.
It said the dividend was being cut in order to fund investment in such ideas.
