The firm, which saw shares suspended following sharp falls, is the most significant corporate casualty of the COVID-19 crisis.
Britain’s biggest shopping centre owner Intu has fallen into administration but says its sites will remain open and continue to trade.
The collapse of the group, which owns the Trafford Centre in Manchester, the Metrocentre in Gateshead and Lakeside in Essex, will arguably be the most significant corporate casualty of the coronavirus pandemic so far.
The appointment of KPMG comes after talks with creditors stalled.
Trading shares in the company were earlier suspended after dramatic falls.
The group has struggled under a £4.5bn debt burden for the past year, but has been hammered by significantly lower rent payments from retail tenants as a result of the since the COVID-19 crisis.
Intu directly employs nearly 3,000 people, but is a disproportionately important player in many of the UK’s regional economies, with a further 102,000 people working in its 17 UK shopping centres.
Another 30,000 people work in Intu’s broader supply chain.
In a statement, the firm said: “Underlying group operating companies remain unaffected and all shopping centres are continuing to trade.
“The intu group’s relationships with its tenants are with these operating companies, not the companies entering administration.
“The shopping centre operating companies have or are expected to enter into transitional services agreements with the administrators of the central entities to ensure continuity of service provision by the central entities to the individual shopping centres.”
The failure of the business will involve one of the most complex administrations seen in Britain’s property industry for years and spark fears for the wider commercial real estate sector, which has been ravaged by the coronavirus crisis.
This week, it appeared that less than 15% of the quarterly rent bill owned by high street and other tenants had been paid, underlining the scale of the crisis engulfing vast swathes of the economy.
The pandemic has prompted a vast chunk of Britain’s retail industry to withhold rent payments, with names such as Sir Philip Green’s Arcadia Group, Boots The Chemist, New Look and McDonald’s choosing not to pay landlords.
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Intu had been one of the London stock market’s worst performers, with its shares down almost 90% during the last year, and equity investors now face being wiped out with the collapse.
The implications for the firm’s individual assets are far from clear.
Rival operators are likely to pursue Intu’s prized assets to take them over, although securing alternative managers of large shopping centres as the retail sector attempts to recover from COVID-19 would be an uncertain process, according to insiders.
An unfamiliar name that owns familiar destinations
Mark Kleinman, City editor
Intu Properties may be an unfamiliar name to many shoppers, but the assets it owns – Manchester’s Trafford Centre, the Metrocentre in Gateshead and the Lakeside shopping centre in Essex – are familiar destinations.
Their owner’s collapse into administration is the culmination of a long journey punctuated by boardroom miscalculations, aggressive balance sheet management and a failure to anticipate the changing dynamics in British retailing.
In total, approximately 130,000 people depend on Intu for their livelihoods.
Many of its shopping centres will be taken on by other operators, but the demise of their parent company will resonate throughout the UK real estate and property industries for years.