intu beats IPD index despite falling rental income

Over 2014, intu Properties net asset value rose from 346p to 379p, an increase of 9.5%. this was achieved on the back of an increase in their underlying property value of 8.2% which was ahead of the return on the equivalent IPD index of 7.3%. The weighted average equivalent yield on their properties fell from 5.79%b to 5.32%. The total property return was 13.1%.

Underlying earnings per share fell from 13.7p to 13.3p as rents fell like for like by 3.2%. Footfall in the centres was stable compared to 2013 but the retailers sold 2.5% more by value. Occupancy was stable at 95%. 1% of the rental income fall relates to the refurbishment work underway at Victoria Centre and Eldon Square. A further 1% comes from tenant failures that occurred in 2012 and 2013 but were still having a knock-on effect early in 2014. The balance relates to a spike in vacancies at Braehead and Potteries as leases expired.

The biggest valuation uplifts in percentage terms were of Parque Principado in Spain and intu Trafford Centre, up 21% and 16% respectively. intu Victoria Centre fell in value by 7% – hit by ongoing refurbishment work.

They have a development pipeline totalling £1.9bn, £1.3bn of which is in the UK and £0.6bn is in Spain.

intu beats IPD index despite falling rental income