Liberty International, which has a significant South African shareholding, said yesterday that it was courting international retailers who might take space in the company's prime shopping centres.
During previous downturns in the retail market, Liberty International CE David Fischel said, large prime shopping malls in the UK had continued to trade well and were “defensive” in nature during difficult times.
The company has a predominant focus on prime regional shopping centres, and last year negotiated leasing deals with international retailers that had not previously occupied space in the group's centres.
Fischel said mall spending had proved to be “very resilient”.
The UK retail market was experiencing slower retail spending growth and there was a “lot of stress in the banking system”.
Previously, consumers had drawn down on their mortgages and now found themselves in a position where they had to repay debt, he said.
“You have to be realistic. You can't expect any great consumer spending figures over the next few years,” Fischel said. It was a difficult market and was expected to remain so for the next few years, he said.
However, Fischel said it did not mean “management can't do anything about it”, and Liberty was constantly improving the tenant mix in its centres.
“The offer in our centres is improving all the time,” he said.
Kay Chaldecott, MD of Capital Shopping Centres (CSC) — the wholly owned Liberty International subsidiary that manages the shopping centre portfolio — said there was a 98,7% occupancy rate, which compared favourably to an average 93% occupancy rate across the UK.
Chaldecott said it “couldn't get better than that” and last year CSC had managed to turn over 138 units in its centres.
“We are moving on total rents and refreshing the tenant mix.” She said 25 lettings last year were to retailers that had not previously taken space in the CSC portfolio. These included G Star, Molton Brown, Coffee Republic, Burberry, Puma, Love Juice, Radley, Links of London and Reiss.
Also, six retailers had chosen CSC for their first store or store launch in UK shopping centres. These included Canadian retailer Fruits and Passion, South African retailer Popcornopolis, Hanna Banana from the US, Germany's Bijou Brigitte and Russia's Vendetta.
The company was generating £7m a year in additional rent by “active tenant mix management”.
CSC also recorded a 6,2% increase in net rental income to £289m last year, compared with the £272m generated in 2006.
Chaldecott said part of CSC's job was to “style hunt” and the group was “following the best retailers”. CSC was “spending a bit of time” nurturing relationships with retailers wanting to enter the UK market.
She said there was an increasing vacancy factor among secondary shopping centres, which were smaller than prime regional shopping centres.
Fischel said all of Liberty International's shopping centres were “still prime, large irreplaceable assets” and it was “not a good time to be in secondary centres and bulky-goods parks”.
Source: Business Day
Published courtesy of
