KPMG called in as shopping centre giant faces financial collapse
29 Jun 2020
Jim Tucker, David Pike and Mike Pink, partners with KPMG’s restructuring practice have been appointed joint administrators to Intu Properties, the owner of some of the UK’s largest shopping centres, which has collapsed under the impact of its debt burden and the impact of coronavirus on shopping habits
29 Jun 2020
Intu Properties owns and operates 17 shopping centres across the UK including the Manchester’s Trafford Centre, Lakeside in Essex, Merry Hill in the West Midlands and MetroCentre in Gateshead, in addition to a shopping centre and development site in Spain.
It directly employs around 2,373 people, including 370 at its head office in London, and each year welcomes around 400m visitors to its sites.
The company’s structure is complex. KPMG has been appointed as administrators to the collapsed plc (the listed ‘Topco’ of the Intu group), in addition to eight Topco subsidiaries.
However, each of the shopping centres is owned individually by special purpose vehicles (‘Propcos’) which are outside of any insolvency process and continue to trade as normal under the control of their directors.
In a statement KPMG said: ‘Importantly, an agreement has been reached with key stakeholders which will allow continued provision of central services to the Propcos. Consequently, all of the shopping centres will remain open and operational while the joint administrators assess options for the business and assets of the group.’
Intu was heavily indebted before the Covid-19 pandemic took hold. Lockdown restrictions barring all but essential shops from being open mean that many of the tenants within its centres have been unable to pay rent, or offered reduced terms. The company said earlier this month that it expected rent collected for 2020 to drop to £310m from £492m a year earlier.
Jim Tucker, partner at KPMG and joint administrator, said: ‘Intu owns many of the UK’s biggest and best-known shopping centres.
‘The challenges affecting UK retail are well known and have been exacerbated by the impact of Covid-19 and the resulting lockdown.
‘As today’s administration makes clear, those challenges have fed through to owners of retail property, even to owners of high-quality shopping centres such as Intu’s.’