Intu, which owns some of the 17 large shopping centres across the UK and three more in Spain, has today announced that it is set to fall into administration, following the devastating impact the COVID-19 outbreak has had on the retail sector.
Before the coronavirus-enforced lockdown in March, the owner of Manchester’s iconic Trafford Centre was in discussions with new and existing lenders about providing new funding to secure its future. However, these talks were unsuccessful.
Prior to the lockdown, Intu had already been struggling, due to decreased footfall mixed with increased debts. Last year, Intu announced losses of around £2bn and debts of around £5bn.
Notwithstanding the progress made with lenders, intu has also appointed KPMG to contingency plan for administration. In the event that intu properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration.
In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres. If the administrator is not pre-funded then there is a risk that centres may have to close for a period.
Intu had put around 60% of its shopping centre staff and 20% of head office employees on furlough since the government scheme was introduced.