SGS - comment

SGS (Formerly INTU SGS) provided their monthly commentary for the month of July, highlighting footfall across their estate was only 7% lower than pre-covid 2019 levels. However, on specific shopping centres levels, the differential is greater with the stronger bigger shopping centres, like Lakeside already ahead of 2019 levels (both on a single month and YTD basis). Altria Watford is also seeing flat footfall versus 2019 for June and July (albeit down 7% YTD). This is driven by higher physical occupancy which is 84% across the portfolio. Tenant sales in July was also at 93% of July 2019 levels. Given the heatwave, summer fashion and footwear sales benefited. Leisure offerings also performed well, and are a key driver of the footfall performance at Lakeside and Watford. SGS tenants are seeing impact of deteriorating consumer confidence, especially in gift/treat brands, which has experienced lower sales. Rent and Service Collections is tracking ahead of business plans with Q3 rent collections of 86% broadly in line with Q2 at a similar point in the quarter. 92% of Q2 rent was collected at the end of the quarter and the expectation is Q3 rent collections will reach the same level.