What is the future for Chapelfield?

13th Jul 2020

The owner of some of the UK's biggest shopping centres, Intu, has called in administrators. Locally, Intu is of course the owner of Chapelfield, but it also owns larger shopping centres nationally, including Lakeside, the Metro Centre and the Trafford Centre.

It has been reported that even before the coronavirus outbreak the company was struggling and had debts of some £4.6bn. Unfortunately it appears that the nationwide lockdown has caused further problems and the company has not been able to reach agreements with its lenders.

But what is administration and what does it mean for the many shops which occupy these well-known shopping centres?

What is administration?

It is the process by which an administrator is appointed to ‘rescue’ the company as a going concern. Unlike with liquidation the company continues to exist.

The administrator has power to do anything necessary to manage the affairs, business and property of the company, as set out in (paragraph 59(1), Schedule B1, Insolvency Act 1986. In addition they have certain specific powers as set out in Schedule 1 of the Insolvency Act 1986 which include:

  • power to take possession of, collect and get in the property of the company and, for that purpose, to take such proceedings as seem to them to be expedient;
  • power to sell or otherwise dispose of the property of the company by public auction or private contract;
  • power to grant or accept a surrender of any lease or tenancy of any of the property of the company, and to take a lease or tenancy of any property required or convenient for the business of the company.

In exercising its powers, the administrator is deemed to act as the company’s agent. In the context of Intu, this means that the administrator is able to “step into the shoes” of the company and deal with the shopping centres as they see fit.

What happens to the shops?

During an administration the properties of a company can be managed as a going concern. If this happens the shops do not necessarily have to close and their leases would usually continue. This means that they still have to continue to pay their rent as usual, although payment would be made to the administrator rather than to Intu. There may well be no apparent difference from the perspective of the customers. If any of the tenants themselves fall into financial difficulty and do not pay their rent the administrator has the power to take possession proceedings or issue proceedings to recover any unpaid debts.

As noted above, the objective of administration is to try to rescue the company as a going concern, either until a buyer can be found or the company is in a healthier financial state and able to stand on its own once again. If this is unsuccessful the company can still go into liquidation. If the landlord company is the freehold owner of the shopping centre the liquidators may choose to sell the property in order to pay off creditors.


Sadly, the impact of the lockdown is likely to result in landlords and tenants alike facing financial difficulties and in this sense Intu will not be alone. It is of course hoped that processes such as administration will assist these companies in their recovery so that life can return to some form of normality.

If you are a landlord or tenant facing financial difficulties the dispute resolution team at Rogers & Norton can advise you further in relation to your options. If you would like to discuss this further please contact me (Elizabeth Gibson) on (01603) 675641 or at eg@rogers-norfolk.co.uk.

Please note that this article is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this article.