What they do
Most people might have heard of this company because they are the owners of the Trafford centre in the north of England.A couple of years back the name was changed to “Intu Trafford Centre” so some of you may have seen its name in various locations around the centre.
Intu are a property investment company who specialise in retail. They hold interests in 18 shopping centres in the UK and 1 in Spain.
Real estate growth – The price of property in the UK seems to keep going up despite seeming too high for a long time now. As with all prices they can’t go up forever, but theres no reason to think it wont keep rising for 10/20/30+ years before a correction happens.
Occupancey rates – Currently reported rates of 95% occupancy in the shopping centres. Untill the next recession hits this number is likely to stay consistent
Acquisitions – The group is still looking at possible new centres to buy, including one in Madrid. This shows that they are still happy to invest in their business model and still predict growth/profit from it in the future.
Director trading – November 2016 saw a deputy chairman purchase approx £100k worth of stock at £2.69/share. This is always a good sign.
Internet – As with most retail companies Intu face competition from people doing their shopping on the internet, this isn’t likely to go away anytime soon.
Not Recession proof – The last recession happened 9 years ago which some people think means we are overdue another smaller one. Looking at records of what happened to Intu in 2008 (it dropped from £11 to £3) these sorts of companies can suffer very badly when people do not have a lot of disposable income to spend.
A relatively safe investment if you are able to hold out in the event of another recession. Brick and mortar shops are under threat from the internet when competing on price but places like the Trafford centre make shopping an experience which also includes food and entertainment which the internet can’t currently match.
The company isn’t likely to rise in value massively in the near future but can expect decent growth in line with property prices rising.
Disclaimer – Not sure if I need this here or not but just in case anyone is confused, I am not a financial advisor and this post is not investment advice to anyone. It is simply a summary of the research I did myself when looking for shares to buy myself.