Is Brexit to blame for Intu deal collapse?
£2.9 billion deal to buy shopping centres goes under
A £2.9 billion deal to buy the Intu group shopping centre collapsed this week after a consortium made up of the Peel Group, Brookfield and the Saudi group Olayan backed out – causing Intu’s share price to plummet.
Now, it has been suggested that a disorderly Brexit could be to blame for the deal falling through with the Bank of England this week suggesting the commercial property value could drop by as much as an eye-watering 48 per cent with England’s exit from the EU in March.
However, Hemant Kotak of Green Street Advisors told ITV’s Business and Economics editor Joel Hills that he believes the consortium realised they were overpaying.
"Everyone likes to blame Brexit but Intu's issues run deeper. The growth in e-commerce means that shoppers are spending less in shops. With sales down, rents are no longer affordable for retailers," Kotak told ITV News. "Nobody wants to catch a falling knife."
Meanwhile, Matthew Oakeshott of OLIM Property told ITV he believed the country to be in the “early stages of a retail property crash”.
"I'm afraid shops and shopping centres are burning platforms in a perfect storm. There's the pressure of the internet and the burden of business rates which is crippling. We've seen plenty of retailers in distress and now landlords are beginning to feel the pain.”