UK Shopping Centre Landlords Heavily Exposed to CVAs, UBS Warns

Four of the UK’s largest real estate investment trusts are heavily exposed to struggling retailers and CVAs, the rising insolvency trend which has become synonymous with the decline of the high street, UBS has warned, the Financial Times reported. The analysis looked at the portfolios of four real estate investment trusts: British Land, Landsec, Hammerson, and Intu. Its findings hinge on using floorspace to weigh exposure to struggling retailers, rather than the more typical industry metric of rental income. A fifth of the four Reits’ shopping centre floorspace is let to retailers that UBS classes as in insolvency or “shrinking”. This includes the increasing number of struggling retailers turning to company voluntary arrangements, an insolvency proceeding that allows financially challenged businesses to renegotiate debts with creditors. Read more