intu reports significant fall in NAV – intu has released results for 2018 that show a drop in its EPRA NNNAV from 349p to 271p. Underlying earnings per share also fell – from 15p to 14.4p. The fall in NAV pushed up the company’s debt ratio to 53.1% from 45.2%.
It said “In a challenging year for the whole retail real estate sector, intu reported a 6.2 per cent valuation fall in the period to 30 June 2018 and a further 3.0 per cent in the quarter to 30 September 2018 with the full year reduction in our assets amounting to 13.3 per cent (GBP1,405.0 million). This is driven by weakening sentiment in the UK retail property investment market as illustrated by the low levels of transactions (see market trends). The valuers’ assumption is that investors will focus on and seek higher net initial yields. In the year, intu’s average net initial yield (topped-up) has increased by 62 basis points to 4.98 per cent. Additionally, given the current challenges for certain department stores, the valuers have taken a more conservative view on ERVs for larger space units. On a like-for-like basis, ERVs decreased by 3.9 per cent…
…non-food retail sales were essentially static year-on-year, but online sales continued to grow so physical sales shrank. In fact, in-store non-food retail sales in the UK have shown a year-on-year reduction every month for the last two years. Retailer costs, by contrast have not declined, not least as a result of the significant burden of the UK’s property tax known as business rates.”
INTU : intu reports significant fall in NAV