Hedge funds reckon Britain’s out-of-town shopping centres will be the latest victims of the massive challenges facing high street retailers.
Previously, shopping centres were thought to be more compelling destinations for shoppers and so more insulated financially.
But City punters have taken out £100 million worth of contracts – or “short positions” – on shares in centre operator Intu, under which they will benefit financially if the price falls, according to the Financial Mail on Sunday.
Intu owns high profile shopping centres such as Lakeside in Essex, Trafford Centre in Manchester and Newcastle’s Metrocentre.
Other property operators linked to the retail sector have also been targeted by short-sellers. They include NewRiver, which operates dozens of centres in locations ranging from Darlington to Kilmarnock to Penge in South East London, and property giants British Land and Land Securities.
The biggest Intu short position is held by hedge funds mogul Crispin Odey through his firm Odey Asset Management. At almost 2% of the company’s value, it is one of Odey’s top five largest London stock market short positions.
His largest is in Debenhams, where he increased his position to 7.1% last month, the newspaper reported.
The fates of shopping centres and department stores are bound together because House of Fraser, Debenhams and John Lewis are regarded as anchor tenants.
The onward march of online shopping has made a huge dent in department stores’ profits.
Ed Meier, equity fund manager at Old Mutual Global Investors, said larger, smarter shopping centres are adding new elements to attract more shoppers for longer visits.
Other sources said some unpopular centres are being turned into housing and flats.