Liberty International hit by troubled shop tenants

City A.M. Reporter
LIBERTY International yesterday said its earnings power remained under pressure after last year's tenant failures and despite welcome signs of relief in Britain&rsquo;s recession-hit property market.<br /><br />Britain&rsquo;s biggest shopping centre owner, which owns much of Covent Garden Market and Lakeside shopping centre, blamed lower income from short-term relettings of space vacated by struggling occupiers and reduced returns from temporary cash holdings for a drag on its earnings.<br /><br />&ldquo;When you have a phoenix company emerging from administration, you don't know how well it&rsquo;s going to trade and therefore we&rsquo;d rather have a short-term let with scope for recovery back to full market rents after a year or so,&rdquo; chief executive David Fischel told a conference call.<br /><br />Liberty&rsquo;s Capital Shopping Centres unit saw a significant drop in the number of retailers going into administration in the period, with 20 units representing &pound;3m of rental income falling into administrators&rsquo; hands, against 125 units and &pound;19.3m in first-half 2009. It said that while further failures could emerge in the coming months, the number of tenants in distress is lower than last winter.