UK’s Biggest Retail Property Companies Take A Huge Hit

The UK’s biggest listed property companies have taken a hit of £2.7 billion in the past year as the number high street chains seeking company voluntary arrangements (CVAs) or falling into administration increased, new figures have shown.

Listed property companies made the £2.7 billion in write-downs on the value of their properties, compared with just £232 million the year before, according to Growthdeck Property’s investment arm.

The write-downs were driven by the fall in value of retail properties. It comes as companies such as Arcadia, New Look and Debenhams slim down their store estates and ask for rent reductions as part of aggressive restructuring plans.

Intu, owner of Manchester’s Trafford Centre, reported write-downs of £1.3 billon, while Meadowhall owner British Land took a hit of £620 million. Bluewater co-owner Land Securities was another victim of the retail crisis, writing down £422 million.

Discontent has been growing among landlords, with the creditors’ meeting for Sir Philip Green’s retail empire Arcadia postponed last month due to a lack of support for the proposals. The plans were eventually passed, but only after the terms of rent reductions were changed to soften the blow for shop owners.

However, Michael Ross, property director at Growthdeck Property, said some operators were still defying the gloom.

“A blanket devaluation of retail properties means that there could be hidden gems if investors know where to look,” he said. “Not all occupiers are financially equal.”

Monsoon is the next business planning to restructure its estate, calling for rent reductions on 135 of 258 stores. The meeting will take place this week for creditors to vote on the proposals.