Intu’s GBP300m placement to fund Milton Keynes centre

Posted On Friday, 01 March 2013 05:15 Published by eProp Commercial Property News
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South African investors have the opportunity to subscribe for up to half GBP300m that is raised through a share placement by UK-shopping centre group Intu Properties.

David FischelLondon and JSE-listed Intu Properties‚ formerly known as Capital Shopping Centres‚ said the share placement was mainly aimed at paying for the £250.5m cash acquisition of Midsummer Place Shopping Centre at Milton Keynes‚ about 90km north-west of London. “As well as current operating metrics and good demographics‚ Midsummer Place offers considerable scope for rental growth‚” Intu CE David Fischel said in a statement on Wednesday.

The acquisition addressed a gap in the group’s UK regional coverage‚ he said. Intu’s shopping centres include ten of the UK’s 25 top rated malls. About 40% of the share register of Intu comprises South African private and institutional investors‚ a spokesperson for Intu said. Intu announced a fully subscribed share placement of up to 86-million ordinary shares‚ representing 9.9% of the issued share capital‚ prior to the placement.

The Reserve Bank had approved the share placing and up to 50% of the placing could be denominated in rands‚ the group said. Midsummer Place had an annual footfall of around 17-million‚ its vacancy factor was 3% and its mix of retailers included Debenhams‚ H&M‚ Topshop‚ GAP‚ Zara‚ Superdry and Apple. Milton Keynes is a city in one of the UK’s more affluent regions.

Intu said the proceeds from the share placing‚ on a pro forma basis‚ was expected to reduce the debt to assets ratio to 47.5% from 49.5% as at December 31. The placing also increased Intu's flexibility to continue to invest in the business. Intu’s pipeline of extension and other projects amounts to £1bn over ten years.

“We start 2013 with robust operating indicators and considerable momentum across the business from a range of attractive investment opportunities‚” said Fischel‚ in commentary accompanying the company’s results for the year to December 31‚ which were also released on Wednesday. The slight dip in underlying earnings to 16.1p from 16.5p for the 12 months to December 31 was a good performance given the challenging market conditions‚ he said.

Chairman Patrick Burgess said the January announcement of the new Intu brand and the group’s digital initiatives were the beginning of a new stage for the company. The name change became effective on February 18 and was aimed at providing a link between the parent company and the individual centres. High capacity fibre optic networks enabling free WiFi and other digital services would be available from next month.  Intu’s dividend for 2012 was steady at 15p compared with 2011.

Net rental income was marginally lower at £363m in 2012 from £364m in 2011. Profit increased to £159m from £34m the year before — the sharp increase was mainly due to valuation and exceptional items.

Source: BD

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