Shopping centre owners Intu have tripled profits in the first half of 2014 following a hefty increase in the market value of the firm’s portfolio, which includes intu Metrocentre and intu Eldon Square.
The developer recorded profit of £602m in the six months to June 30, a huge hike in the £200m reported in the corresponding period in 2013.
The firm attributes the rise to a series of factors, including an increase in the property revaluation gain which now gives its centres an overall valuation of £8.84bn.
Intu Metrocentre now has a market value of £922m, while intu Eldon Square’s value has risen by £15m to £265m – two examples of the firm’s super-regional centres that have out-performed rivals because of investment demand.
The firm confirmed projects have been completed at many of their centres, including the new Platinum Mall at Gateshead’s intu Metrocentre, and said that restaurant plans for both of the North East shopping complexes are making good progress, especially in terms of attracting tenants.
Matthew Roberts, chief financial officer said: “The improvement in the UK economy combined with increases in consumer confidence and retail sales has boosted investor demand for shopping centres with considerable investment activity in the first half of 2014.
“The increased weight of money looking to invest in the shopping centre market has led to yields compressing and capital values rising as bidding processes have become increasingly competitive.
“This has been most noticeable at the prime end of the market but has also spread across other shopping centre sub-sectors.
“In 2013, we launched our new national consumer brand, intu, in response to the changing retail landscape. Shopping is no longer just about buying things you need, today’s customers demand much more and their spend is very clearly linked to dwell time in our centres.
“Shopping centres are now expected to offer convenience, choice, great tenant mix, flagship stores, home delivery, click and collect, leisure activities, great dining options, entertainment, socialising, communicating and a place to meet with friends and family.
“We are evolving our centres. Our brand enables us to distinguish ourselves and communicate the change. By giving our customers a great experience, they will come more often and stay longer, driving spend for the benefit of our tenants.”
Roberts also said the firm’s websites are all in the process of being upgraded to be fully mobile responsive.
Wi-Fi is now available at 11 centres and 4G is to be introduced in six centres.
David Fischel, chief executive, added: “Intu has recorded a strong first half performance with a 7.6 per cent like-for-like valuation uplift, increasing net asset value per share to 372p and taking the overall market value of our prime UK shopping centres to £8.8 billion. The initial indications from the major centres we acquired in the period, now rebranded as intu Merry Hill and intu Derby, are very positive. The letting market is showing encouraging signs of improvement and we are gaining further momentum with our £1.2 billion active management and development pipeline.”