Intu talks tough with bigger brands on rents

By

Sandra Halliday

Published
Apr 2, 2020

Struggling property giant Intu is prepared to get tough with some tenants who don't pay the rent and service charges they owe, a report said on Thursday. The company has sent a letter to tenants saying that it would “take robust action where rent and service charge payments, contracted under lease obligations” aren't paid.

The letter was reported by Property Week and said that while Intu remains sympathetic to the difficulties that its tenants face, “we have our own binding responsibilities to our funders and investors, as you will understand”.

It’s unclear at present which retailers the company is putting pressure on to pay up, but it's likely that it's expecting rents to be paid by the larger companies with healthier cash flows. It told Property Week that “we are happy to engage with brand customers on a case-by-case basis, but we have neither the desire nor financial capacity to bankroll global, well-capitalised brands that have just decided they don’t want to pay their rent”.

As well as getting tough with global brands, it said it would likely take the same approach with UK retailers, especially those that “are beneficiaries of significant financial support from the government”.

The letters could be followed by ‘statutory demands’, formal requests for the debt to be paid. In that case, the debtor has 21 days from receiving the demand to reach an agreement for payment with the company to which it owes the money.

Intu said last month that it had only received 29% of the rent that was due for the latest quarter, compared to 77% a year earlier. That meant it would need to seek covenant waivers from its lenders.