UK shopping mall owner Intu is set to enter administration, becoming the latest casualty of a coronavirus pandemic that has inflicted more pain on the country’s struggling retail sector.
The company, whose malls include the Trafford Centre in Manchester and Lakeside in Essex, had sought breathing space on its debts from lenders, but said in a statement on Friday that “insufficient alignment and agreement has been achieved on such terms”.
The next step “is likely to involve the appointment of administrators,” the group said.
Intu’s struggles are the latest evidence of the damage wrought by coronavirus on a sector already grappling with the shift of consumers online. The lockdown imposed by the government in March meant rent collection has plummeted for retail landlords, cutting off their income.
On Wednesday, when UK retailers had to pay rent for the three months to September 29, just 14 per cent of the £2.5bn due was paid, according to Re-Leased, a property data company.
With an administrator set to be appointed, it is unclear what will happen to Intu’s shopping centres.
“Everyone is having to game every scenario possible,” said one person involved in the discussions, who may be asked to take control of some of Intu’s assets. “We could be on site by Saturday morning.”
New managers would have to be found for each of the company’s centres, a process that is likely to take time. KPMG, which has been lined up as administrator, had previously warned creditors they would have to pay £12m to keep the company’s centres open as new owners were sought.
But Intu’s problems predate the pandemic.
The company was weighed down by more than £4.5bn in debt and the value of its portfolio — comprising 14 wholly-owned centres and three joint ventures — fell by 22 per cent in 2019 to £6.6bn. The company posted a £2bn loss for that year.
Intu’s shares have fallen steadily over the past five years, from £3.50 to around 10p before coronavirus.
On Monday, police were called to the Trafford Centre after an Intu shareholder — enraged at having lost money on the company’s sinking stock — damaged a customer service desk.