Shopping centre owner, Intu Group has entered administration. The company has announced that it has appointed James Tucker, Michael Pink and David Pike of KPMG LLP as joint administrators.
Underlying group operating companies remain unaffected and all shopping centres are continuing to trade. The intu Group’s relationships with its tenants are with these operating companies, not the companies entering administration.
The shopping centre operating companies have or are expected to enter into transitional services agreements with the Administrators of the central entities to ensure continuity of service provision by the central entities to the individual shopping centres.
Retail expert Dr Gordon Fletcher, of the University of Salford Business School, said: “Intu’s fall into administration will probably be remembered as the biggest corporate failure of the pandemic lockdown. However, with nearly £5bn of debt and no more lifelines from its creditors Intu’s predicament predates COVID-19. KPMG the newly appointed administrators have said that the centres will remain open. This means that for most consumers there will be little visible difference. But for the tens of thousands employees who work for one of Intu’s many tenants these are uncertain times.”
“As one of the biggest landlords for so many retailers that were forced to shut during the lockdown the end of this property company was rapidly accelerated. Incomes from rentals contracted and the business model is primarily based on this single source.
“The model for all shopping centres has changed little since the 1960s but consumers have. The consumer desire for experiences override the utilitarian functionality of this model and will need to be a consideration for any prospective buyer for Intu’s many large properties.”
Adam French, Which? Consumer Rights Expert, said “Intu going into administration could mark a seismic change for bricks and mortar retail destinations.”
“For the time being stores will remain open and your consumer rights should be unaffected, but we would advise anyone with an Intu gift card to consider spending it as soon as possible.”