Intu, the group owning a number of large shopping centers, including the Trafford Centre in Manchester, has entered into administration today.
Intu's financial difficulties were documented long before COVID-19 (with £4.5bn of debt last year) , but it is apparent that the pandemic has been the final nail in the coffin as tenants fail to make rental payments.
As the government continues to legislate to protect tenants from the financial effects of COVID-19 (including the suspension of winding up petitions, prevention of forfeiture for non-payment of rent and changes to Corporate Rent Arrears Recovery), it has perhaps been taken for granted that commercial landlords will have to (temporarily at least) go without any ability to enforce payment of rent from their tenants.
If the landlords themselves can't survive a suspension of payment of rent by tenants, then the impact of COVID-19 on the High Street could be far bigger than anyone could have imagined. Indeed, Intu directly employs 3000 people and over 100,000 are employed in its 17 shopping centres.
Whilst it is anticipated that, at this point in time, the shopping centres will continue to trade through Intu's underlying group companies, this news has given the High Street another reason to worry about its future.
The owner of some of the UK's biggest shopping centres, Intu, has called in administrators.