INTU SGS - comment

Some slightly worrying stats appearing in the recent monthly report from INTU SGS, which shows Q4 rent collection (82%) showing a deterioration versus Q3 rent collection (86%) at a similar point in the quarter. This is really the first time we have seen this. Service collection isn’t showing this slight reduction versus previous quarters. This may be explained by the increase in rent rates subject to turnover rent (which takes longer to agree) but it still remains a worry.

Tenant sales in October were 6% lower than October 2019 levels, this is an improvement versus September’s 13% lower figure, but with the level of inflation, sales figures should be trending above historic levels. This is in line with the wider market that Q3 tenant sales are lower than Q2. October is the start of the Christmas season, so focus will be on the upcoming monthly stats.

In summary, footfall and tenant sales are in line with the wider UK market trends, with SGS’s shopping centres outperforming the wider market, due to their relative position. The Christmas season is still the key trading period for all retailers.