The company behind Manchester’s Trafford Centre has seen its profit more than halve despite its revenue soaring to almost £100m, according to newly-filed documents.
The iconic shopping complex, which has been a retail landmark in the city since it opened in 1998, saw its pre-tax profit drop from just under £70m in 2022 to £29m last year.
This was despite its revenue growing to £94.6m during the 12 months, up from £88.4m in 2022.
Trafford Centre’s net rental income also increased, totalling £64.6m during the 12 months, up from £62.9m in the year before.
The centre’s occupancy levels remained relatively unchanged, ticking up slightly to 91.1 per cent from 91 per cent in the year before, while footfall also increased marginally to 20.8m people from 20.1m in the previous 12 months.
The company behind Trafford Centre increased its debt to £364m from £243m in the previous 12 months.
Despite falling profit, the company said it was confident it continued to be a “must have” location for retail and leisure businesses.
Trafford Centre still North West’s ‘leading retail destination’
In a statement published to Companies House, Trafford Centre said: “The Trafford Centre has had an extremely active year as phase one of our strategy to stabilise income and occupancy levels has been successfully delivered.
“Of particular note was the opening of the 140,000 sq ft M&S in November that re-anchored Regents Crescent.
“The store provides their latest concepts in food, fashion and home and trade has grown materially since they relocated from their lod store.
“There was a net increase in occupancy of one per cent as a consequence of the relocation and occupancy levels have remained stable year on year.
“Over the course of 2023 footfall and sales continued to grow at Trafford, outperforming 2022 which in itself was a strong year.
“We continued our focus on brand mix bringing in 14 new brands to Trafford across a range of uses and price points such as Lululemon, Lounge, Mango, Lego, New Balance, Bath and Bodyworks and ProCook.
“Lease renewals were also a focus for us in 2023 with 30 expiries being renewed at rents well in excess of the valuation ERV’s.
“Both the lettings and level of renewals demonstrate Trafford continues to be a ‘must-have’ location for retailers and restaurants and its reputation as the leading retail destination in the North West is now embedded in the mind of occupiers.”
How are UK shopping centres faring?
In March The Mall Wood Green owner Capital and Regional reported a slight uptick in footfall across its shopping centres driven by a rise in customers shopping at discount stores.
The property real estate investment trust (REIT) said in that 2023 the number of people shopping across its estate rose 1.5 per cent to 44.5m visits, representing 86.7 per cent of the equivalent period pre-pandemic.
Chief executive Lawrence Hutchings said he noticed consumers are “increasingly focused on value for money as well as prioritising spend on non-discretionary items”.
Meanwhile British shopping centre giant Hammerson reported a record year of leasing completing 306 deals in 2023.
During the year the firm delivered adjusted earnings growth of 11 per cent to £116m, and said footfall across its estate was up three per cent year-on-year.
Gross rental income for the year totalled £208m, down slightly from £215m the year before, due a number of disposals.
Mike Ashley’s Frasers Group has also demonstrated its confidence in the sector as it purchased a number of shopping centres over the past 18 months.
Last year, Frasers bought The Mall shopping centre in Luton for £58m deal and the Overgate centre in Dundee for £30m.
More recently, the FTSE 100 retailer bought Junction 32, an outlet shopping centre near Castleford, West Yorkshire, for £50m.
Experts have suggest that Ashley is keen to snap up malls and fill them with Frasers’ own brands, such as Jack Wills, Sports Direct, and Flannels.