PRESS: Property Firms At Risk Of Rent Cuts From Debenhams Portfolio

LONDON (Alliance News) - Several London-listed property firms may face rent cuts as troubled retailer Debenhams PLC looks to restructure its store portfolio, the Financial Times reported on Friday.

Debenhams is in talks with landlords to negotiate changes to its store portfolio, including 50 store closures, the newspaper said.

There is also the possibility of instituting a company voluntary arrangement, which would lead to forced rent cuts at some stores and further store closures.

Out of Debenhams's 165 stores, 30 are owned by listed property companies, with British Land Co PLC and Intu Properties PLC having the highest exposure to the retailer by owning eight stores and six respectively, the FT reported, citing data from Colliers International.

British Land in particular has been looking to sell four free-standing Debenhams stores since December, following the disposal of the retailer's Oxford Street branch in July 2016, it said.

Other property groups with exposure to Debenhams includes Land Securities Group PLC which owns five stores, Capital & Regional PLC with four, and Hammerson PLC with three stores, according to the newspaper.

The FT also noted that funds run by asset managers were also exposed to the Debebhams situation, with Aberdeen Standard Investments owning seven stores.

https://www.ft.com/content/b1129386-1a72-11e9-9e64-d150b3105d21

Last week, Debenhams entered talks with its lenders after like-for-like sales for the six weeks to January 5 fell 3.4% amid a tough UK trading environment.

On the same day, Debenhams's two largest shareholders, which include Sports Direct International PLC with nearly a 30% stake, and Brandes Investment Partners Inc, with an over 12% stake, voted at the company's annual general meeting against the re-election to the board of Chair Ian Cheshire and Chief Executive Sergio Bucher to the company's board.