Shares of shopping center giant Intu Properties plc — which runs Manchester’s Trafford Centre, Newcastle’s Eldon Square, Gateshead’s Metrocentre and Glasgow’s Braehead — fell 8% on Wednesday after it scrapped its final dividend due to tough conditions in retail.
Intu said retaining the dividend would allow it to continue to invest in its malls after a year in which its net rental income had fallen by around 1.9% and the value of its UK assets had shrunk 13.3%.
Intu also said it would look to sell some assets in the UK and Spain.
In November, a consortium led by Intu’s deputy chairman John Whittaker scrapped a £2.91 billion takeover offer for the firm.
The consortium, which included Peel Group, the investment vehicle of the Whittaker family, Saudi Arabia’s Olayan Group and Canadian property investor Brookfield Asset Management cited “uncertainty around current macroeconomic conditions” for the withdrawal.
John Strachan, intu Chairman, said on Wednesday: “intu has had a challenging year with a difficult retail and uncertain economic environment, together with responding to two abortive corporate offers for the company.
“However, our management team has produced a robust operational performance with increased like-for-like net rental income for the fourth consecutive year, 97 per cent occupancy and signed 248 new long-term leases.
“This outcome is testimony to our long-term strategy of investing in our centres and the intu brand, making them different, attractive and exciting so retailers look to our centres as key trading locations.
“Our three core objectives for the year ahead are to continue to deliver strong underlying individual centre performance, continue our strategy of adapting to the changing retail environment and to make smart use of capital.
“We propose to reduce our debt to assets ratio over time back below 50 per cent by further disposals and part-disposals and retaining the cash generated by our activities rather than distributing it as dividend, to enable us to invest in our winning destinations.”