Intu and Hammerson lead on income losses

Shopping centre landlord Intu collected just 29 per cent of rent due on 25 March, compared with 77 per cent the same time the prior year, while Hammerson received just 37 per cent of UK rent billed for the second quarter. 

The closure of 17 of the 20 premium outlets held by Hammerson's interests in Value Retail and VIA outlets, which include Bicester Village in Oxfordshire, also weighed heavily on the group’s rental receipts as 36 per cent of gross rental income is based upon tenant trading performance. 

The group, which has £1.2bn in committed facilities and cash, drew a further £100m in debt. The tightest gearing tightest covenant is 150 per cent, which compares with a ratio of 65 per cent as at 31 December 2019. The value of unencumbered assets as a proportion of unsecured debt stood at a multiple of 1.89, against a covenant multiple of 1.5 on the private placement senior notes. That has fallen from a multiple of 2.1 at the end of 2018.

The situation is most desperate for Intu, which said it was in discussions with lenders over covenant waivers following the reduction in rental income. It also revealed the receipt of £95m in proceeds from the disposal of intu Puerto Venecia would be in the middle of May at the earliest following delays to regulatory approvals. 

It has £184m of immediately available cash and facilities, but had £4.7bn in net debt at the end of December. In March it warned that portfolio decline of 10 per cent could create cure requirements of £113m and a £161m repayment of the revolving credit facility.

Capital and Regional (CAL) received half of rent due, compared with a typical collection rate of at least 80 per cent. At the most recent test date in January, headroom on the covenants attached to its four asset-backed debt facilities was equivalent to a minimum of 37 per cent of the respective annual income and most facilities were in the range of 37 per cent to 45 per cent.