intu Properties remains confident of delivering further growth in like-for-like net rental income in 2018 and at a level of 2-3% over the medium term.
It also announced that it was forming a joint venture with LaSalle Investment Management acting on behalf of Greater Manchester Pension Fund and West Yorkshire Pension Fund to jointly own intu Chapelfield shopping centre in Norwich.
intu said LaSalle would acquire a 50% interest in the property for net consideration of £148 million, before working capital adjustments, which represents a net initial yield of 5.0%.
intu said the consideration for the 50% interest was in line with the valuation at 31 Dec 2016 of £296m (100%) and a small discount to the valuation at 30 Jun 2017 of £305m.
The net rental income of the property was £15.5m for the year ended 31 Dec 2016.
In a trading update for the period since 2 Jul, chief executive David Fischel said: 'We have recorded another active quarter with strong tenant demand. 73 long term leases have been agreed which are ahead of a robust comparative period in 2016.
'We anticipate achieving a third year of positive like-for-like net rental income as we continue to attract well-known international and national brands.
'intu's nationwide portfolio allows international retailers opportunities to expand their UK coverage with brands such as Victoria’s Secret (US), Lovisa accessories (Australia) and Inglot cosmetics (Poland) having all taken further stores in the period.
'Other major flagship brands, such as Next, Primark, Decathlon, Footasylum and Nespresso, are optimising their store sizes in our must-have quality locations.
'Our Spanish centres continue to perform well with occupancy levels remaining high and 10 long term leases have been signed in the quarter.
'Our recently acquired Madrid Xanadú shopping centre has benefited from our relationships with UK and Spanish retailers and since acquisition we have introduced Quiz, Vans, G-Star and TGB to the centre.
'Although retailers continue to be selective with their expansion plans in the challenging consumer environment, our 20 prime centres are the first port of call because of their strong catchment, reliable footfall and differentiated leisure content.
'This leaves us well positioned to take advantage of this demand and we are confident of delivering further growth in like-for-like net rental income in 2018 and at a level of 2 to 3 per cent over the medium term.'