Merry Hill shopping centre lined up for sale by struggling intu
Shopping centres group intu is reported to be lining up the massive Merry Hill complex in Brierley Hill for sale.
The group warned this week that it could go bust if it cannot raise fresh funds after reporting a £2 billion annual loss for 2019.
It is working with commercial property firm CBRE on marketing intu Merry Hill, intu Milton Keynes and its 50 per cent stake in St David's, Cardiff, to potential buyers.
Embattled intu needs to raise funding as it seeks to pay down a £4.5bn debt mountain.
The company said on Thursday that there was “material uncertainty” over its ability to continue as a going concern as it faces a cash crunch after recently being forced to abandon plans to raise up to £1.5bn to pay down debts through a shares issue.
The three assets have a combined value of just over £1bn for intu, but have £785.9 million of debt held against them. If sold at book value that would provide only £214.4m of equity.
Intu has yet to comment on the sell-off but Rhodri Davies, head of UK retail at CBRE, has confirmed it was working closely with intu on the marketing of the three assets.
Merry Hill opened in 1985 after being built by Oldbury developers Don and Roy Richardson.
The shopping centres giant bought 50 per cent of 229-acre Merry Hill from Westfield for £407.5m in 2014 and began managing the centre. It bought the other half from Queensland Investment Corporation two years later for £410m.
A deal for intu - which also owns the Trafford Centre in Manchester, Lakeside in Essex and Metrocentre in Newcastle-upon-Tyne - to merge with Birmingham Bullring and Grand Central owner Hammerson fell through in 2018.
Intu has been hit by the decline of traditional in-store shopping as internet sales have soared in recent years.
It was forced to write down the value of its shopping centres by £1.9bn last year.
The value of intu Merry Hill, which is in the midst of a £12m exterior revamp, has dropped to £587.6m.
Intu still has a £453.9m debt for Merry Hill which matures in 2024.
The vacancy rate at the 268-store shopping centre improved from 6.6 per cent in 2018 to 5.4 per cent last year.
