Intu Plunged Into Bankruptcy

Intu Plunged Into Bankruptcy

over 3 years ago2 mins

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Another quarter of widespread rent refusals plunged European real estate investment giant Intu into bankruptcy on Friday 📉

What does this mean?

Back in March, Intu – which owns numerous UK shopping landmarks – only received 30% of the quarterly rent it was owed as retail tenants suffered from shuttered stores. And last week it managed to get just 14% of the rent it was due for next quarter. That put Intu in a tough spot: it owed money itself to banks and bondholders and was unable to agree a revised payment plan. Entering “administration” hands control of the company to its lenders, who may now seek to recover some cash by way of a restructuring.

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Retail landlords may have further struggles in store. Swedish fashion giant H&M reported its first quarterly loss in more than a decade on Friday; like rival Inditex, it could soon start reducing its physical footprint. Microsoft, meanwhile, announced on Friday that it was closing all its stores 🚫

Why should I care?

Intu’s shares had already lost 95% of their value this year, and they fell another 50% on Friday before trading was suspended. With as much as 60% of British retail space reportedly owned by the public 🇬🇧 – albeit largely indirectly through pension investment pots – the professionals stewarding people’s money might see Intu’s collapse as a sign that they need to focus on industries less at risk of failing to pay out the all-important dividends retirees rely upon for income.

Amazon agreed last week to buy autonomous vehicle startup Zoox for $1.2 billion, perhaps planning to integrate Zoox’s technology into its expanding delivery network 🚚 In the not-so-distant future autonomous delivery may put even more pressure on malls: even cheaper transport of products to peoples’ homes makes them even less likely to bother shopping in person.

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