Intu Properties is planning a £500m refinancing of its Metrocentre in Gateshead in the next few months, said its finance director Matthew Roberts after the company released an update this week.
Restructuring the debt secured on the Metrocentre will be Intu’s first major refinancing since it raised £800m in bonds in February in a £1.3bn debt refinancing of four of its centres – Lakeside in Kent, Braehead in Glasgow, and the Victoria Centre in Nottingham and Watford. Together the four centres represented one-third of Intu’s total debt. The four centres are valued at £2.3bn in total.
Roberts said that one of the aims of the earlier deal was to make the period of the debt more closely match average lease lengths. The February refinancing pushed the average life of the debt up from two years to 10 years on 4.4% for the fixed-rate bond. A similar approach is likely for the Metrocentre debt.
Roberts said: “It really makes sense to us to make plans for longer-term debt to match our average lease lengths.”
The Metrocentre refinancing will be carried out in conjunction with Intu’s co-owner at the Metrocentre, the Singapore sovereign wealth fund GIC.
In its latest update, Intu said that footfall at the Metrocentre was down 1% in the first quarter of the year compared with the same period in 2012. It said this compared well with Experian’s measure of national retail footfall, which was 4% down on last year’s figure.
There was also a 1% fall in occupancy levels in the centres, said Intu, although total occupancy remained at 95%. This figure included 3%, measured by rent, of shops that are in the hands of administrators.
The occupancy figure was bolstered by 33 new long-term leases signed in the quarter, representing around £8m in passing rent.
The name Intu was created in January. The group was known previously as Capital Shopping Centres.
david.harris@estatesgazette.com
