Shares in JSE-listed UK property group Intu tumble as Brexit jitters hit

(iStock)
(iStock)

Shares in JSE-listed UK mall owner Intu Properties [JSE:ITU] tumbled on Thursday, as the company faces mounting debt and a jittery market prompted by Brexit fears back at home.

Intu, which is battling tough trading conditions in the UK, saw its stock on the local bourse go down as much as 17%, to trade at R4.30 on Thursday afternoon, after opening at R5.55. The stock had on Wednesday closed at R5.64.

By 17:00, it had recovered slightly at R4.86. 

Intu owns 17 of the largest shopping centres in the UK, including the Trafford Centre in Manchester, as well as a couple of Spanish malls.

The company is battling a £4.9bn (R91bn) debt burden, and is considering selling some of its UK malls, and is making progress to sell two Spanish properties, as Fin24 previously reported.

Analysts speculated that the impact of the Brexit vote in November might be one of the factors affecting trade conditions in the UK, where its business is concentrated.

'Extreme panic'

"It's clear that extreme panic has hit the stock, as it was punished to levels never seen before. UK property has been in a place of uncertainty since the Brexit vote," said Johann Biermann, independent market analyst.

He added that Intu's debt, nearly the same as its Enterprise Value, was a further challenge.  

According to Musa Makoni, a trading specialist at Purple Group, Intu shares, as well as other UK-focused mall owners, have suffered due to poor trading updates from UK retailers such as Marks & Spencer, which occupy most of their spaces.

"As such, there is increasing speculation that most of these retailers might ask for rent reductions, or in the worst case scenario be forced to close some of their outlets to cut on rental costs which would ultimately affect their profitability significantly," he said.

The share price slump also followed a Friday announcement by Coronation to cut down its shareholding in the company, from 12.9% to 11.9%.

ZAR/USD
17.16
(-1.12)
ZAR/GBP
21.53
(-1.50)
ZAR/EUR
19.35
(-0.76)
ZAR/AUD
11.92
(-0.68)
ZAR/JPY
0.16
(-0.96)
Gold
1794.70
(+0.56)
Silver
18.25
(-0.07)
Platinum
837.00
(+2.13)
Brent Crude
43.07
(+0.70)
Palladium
1923.68
(+0.25)
All Share
55243.80
(+0.72)
Top 40
50922.32
(+0.83)
Financial 15
10086.99
(-0.47)
Industrial 25
76855.87
(+0.55)
Resource 10
52017.34
(+1.71)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1734 votes
I am taking a hit, but should be able to recover in the next year
23% - 2270 votes
My finances have been devastated
34% - 3392 votes
It's still too early to know what the full effect will be
25% - 2455 votes
Vote