Picture: INTU
Picture: INTU

Analysts have been critical of Intu Properties’ methods to turn around its fortunes, saying the company should have brought new blood into its management. 

Intu — which was formed when Donald Gordon’s UK real estate group, Liberty International, split in 2010 — has made a number of investors impatient after underperforming in the past few years.

Shares in the group, which owns a portfolio of British and Spanish shopping malls, have fallen 66% over the past five years. Its UK portfolio is made up of 17 shopping centres, and in Spain it owns three, with plans to build a fourth. Its malls and developments are worth about £9.2bn but the value of these assets has been under strain.

In an attempt to bring momentum to the company, its board replaced long-standing CEO David Fischel with former CFO Matthew Roberts at the beginning of May and last week a new chief investment officer, Dushyant Sangar, was appointed. Sangar was formerly an operations manager at Intu. 

In April, Barbara Gibbes was appointed as Intu’s interim CFO. Hers is the only external appointment. 

Critics say Intu’s management should come up with fresh ideas, with Fischel having been in charge since 2001. Evan Robins, listed property manager of Old Mutual Investment Group’s MacroSolutions boutique, said Fischel’s long tenure means Intu’s management has not been shaken up for years.

Peter Clark, a portfolio manager at Investec Asset Management, said the changes in management are largely internal appointments and the management team still has its work cut out. 

“It is hard to ignore the deep discounts in value in both Intu and competitor Hammerson’s share price. Sentiment is incredibly poor. However, the fundamentals are far from as dire as the share prices would imply,” he said.

“The management changes at Intu have all been internal promotions. The company needs some radical decision-making to move it forward out of its balance sheet mess, and I hope the new management is able to adjust their thinking. Time will tell,” Clark said.

Head of listed property at Stanlib Keillen Ndlovu said the market perceives the new management at Intu to be “more of the same” and people expected outsiders to be appointed to shake up the management strategy.

In 2018, the value of Intu’s property portfolio plummeted in the wake of the continued uncertainty around the Brexit process, which will result in the UK leaving the EU. Intu reported that its net asset value fell 24% in 2018 as its investments, like those of many of its peers, were revalued downward.

The group has warned that its 2019 has been difficult too, saying that its rental income is set to fall up to 6% this year.

British property owners such as Intu are also having to manage company voluntary arrangement arrangements, in which financially distressed businesses renegotiate their leases or shut outlets, placing added pressure on rentals.