The owner of the Trafford Centre Intu Properties has issued a warning this morning that it will breach the terms on its debt commitments following a collapse in the rents received from its retail tenants.
The group which also owns the Lakeside Shopping Centre said that it had collected just 29 per cent of rents due from tenants yesterday.The comparable figure last year was 77 per cent.
The statement added:
“As at 24 March 2020, we had immediately available cash and facilities of £184 million at the corporate level. The impact of COVID-19 in Europe is delaying certain regulatory approvals in relation to the disposal of intu Puerto Venecia and we now expect the £95 million proceeds to be received in the middle of May at the earliest.
We have significantly reduced capital expenditure for the foreseeable future and are cutting back on head office costs to maintain additional cash within the business. In addition, to support our customers, we have initiated a programme of reducing non-essential service charge costs and are passing on these savings to them.
The reduced social activity is likely to continue for the foreseeable future impacting our footfall and potential future rents. The impact of the reduced rents received is expected to require us to seek covenant waivers and we are in constructive discussions with the relevant lenders.
In addition to the immediate actions we have taken to preserve liquidity, we have an ongoing dialogue with the UK Government and may look to access their £330 billion support package. In their recent announcement for the protection of commercial tenants from the non-payment of rent, they also stated that they are actively monitoring the impact of this on commercial landlords’ cash flow. Other Government measures announced of business rates suspension, employee cost support and tax payment deferrals, are also expected to have a positive impact.”