LONDON-Liberty International expects to benefit from the tough retail market, despite revealing that its profits will be halved. "The group's experience from previous retailing downturns is that established prime regional shopping centers with the best retailers trading from flagship stores are exceedingly resilient," a company statement says. It reported interim pretax profit in the six months to June 30 at euro 188.54 million pounds ($226 million), compared with euro 402 million ($486 million) a year ago.
Liberty officials report that the noticeable slowdown in UK retail sales continued in the first half, particularly in the second quarter. However, fashion goods, "which are the predominant product mix within our centers, have generally fared better than household goods, which have been more severely impacted by the anticipated downturn in the UK housing market," the statement says.
Liberty is not directly exposed to pressures facing retailers, since its rental-income growth is linked to rent cycles rather than to fluctuations in UK retail sales.
"We look at the retail market from the landlord's point of view," says chief executive David Fischel, "and all we can say is our vacancy level remains very very low--25 units out of 1,727. So, effectively, our centers are full."
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