(Adds company comments and details; updates shares)
By Esha Vaish and Justin George Varghese
Feb 23 Britain's Intu Properties Plc
hiked its full-year dividend as values and demand for its large
shopping centres held up well despite weakness in the broader UK
property market following the Brexit vote.
Although UK retail property values fell 5 percent in 2016,
according to CBRE, Intu's adjusted net asset value per
share was flat at 404 pence, helped by its strategy of owning
better-performing 'destination centres' that have drawn visitors
with attractions such as food courts.
The company, which has been selling smaller malls that have
struggled to combat online competition, said life-for-like net
rental income rose 3.6 percent in the year ended Dec. 31, in
line with its forecast in July.
The company said it expected comparable rental income to be
flat to up 2 percent in 2017, even though analysts have warned
values and rental demand could fall this year due to uncertainty
"While the environment for business this year is likely to
be challenging as the full impact emerges of the UK's EU
referendum vote, we are well positioned as we focus on top
quality assets in prime locations," Chief Executive David
Fischel said in a statement.
The owner of popular British shopping malls such as
Manchester's Trafford Centre said 2016 dividend rose 2 percent
to 14 pence per share, its first hike since 2007, when the
company was called Liberty International before a demerger.
Shares in Intu were the top FTSE bluechip gainers by
0128 GMT, having gained 6.8 percent but still trading below
their pre-Brexit level.
Rival Hammerson reported higher full-year NAV on
When asked about reports that landlords are providing higher
incentives such as longer lease-free periods to lure tenants,
Intu Chief Financial Officer Matthew Roberts said the company
had not increased incentives.
"Incentives over the last few years have continued to reduce
in quantum and in size... and we expect incentives in 2017 to be
similar to be where they were in 2016," Roberts told Reuters.
Leading retailers such as Zara-owner Inditex SA
were opting to take larger space in Intu's "top" malls after
shuttering shops in smaller retail outlets that have seen lower
visitor numbers, he added.
Intu signed 214 long-term leases over 2016, at rates 4
percent ahead of estimated rental values.
(Reporting by Justin George Varghese and Esha Vaish in
Bengaluru; Editing by Sunil Nair and Maju Samuel)