Intu cuts debt as it sells 50 per cent stake in Derby shopping centre to Kuwait firm

UK property owner Intu has sold a 50 per cent stake in its Derby shopping centre to Cale Street Investments, a Kuwait-backed real estate investment firm.

The stake was acquired for £186.3m as the two firms enter a joint venture at the East Midlands shopping centre, which is visited by 22m people each year. 

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Intu bought the centre for £390m in 2014 and had rental income of £25.2m last year, but despite the company's market valuation of £1.33bn, it has a net external debt of £4.87bn.

"In what is a challenging investment market, this innovative transaction, which is in line with the December 2018 valuation, shows Intu is delivering on its strategy of reducing loan to value through disposals and part-disposals," said Intu's new boss Matthew Roberts.

"On a pro-forma basis, we expect the impact of this transaction to reduce our loan to value by around one per cent."

The firm had said in February it would hold off on British disposals until Brexit was resolved, but with that being delayed until the end of October, investors have decided to act.

Intu's debt to asset ration rose to 53.1 per cent in 2018, up almost eight per cent on the year before, but it plans to bring this back down to below the 50 per cent mark.

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It is also looking to sell off other assets in Spain.

Following the news its share price remained unchanged.