LONDON, United Kingdom  — Shares in British shopping centre operator Intu sank more than 21 percent on Wednesday after reporting a fall in first-half net rental income on Wednesday, the latest sign of weakness in a struggling British retail sector.

Intu, which scrapped its dividend earlier this year and changed management after two failed takeover bids, said it was adopting a new five-year strategy to reshape its business and focus on fixing its balance sheet.

Intu forecast like-for-like net rental income down moderately in 2020, after a 7.7 percent fall in the six months ended June 30. Its shares were down 21 percent to 55.3 pence in morning trade.

The selloff in the company's shares also weighed on other mall operators. European peers and real estate investment trusts (REITs) such as Hammerson, Uniball-Rodamco and Derwent London were all trading lower.

Intu has been hit with high-profile closures and company voluntary agreements - an insolvency procedure used by retailers to restructure leases - from brands like Debenhams, Toys R Us, House of Fraser, New Look and HMV.

"With no sign retail pressure is easing and full disposals proving hard to achieve there is little we believe management can do to ease pain in the near term making an equity raise more likely," Liberum analysts said, calling it an "awful H1".

"Challenging"

A series of company voluntary agreements have led to uncertainty over the value of the income from retail properties and many British property developers have been looking to move away from the ailing retail sector.

Many retail firms are also shutting down stores to cut costs and focusing on online sales, dealing a blow to real estate firms like Intu, Hammerson and Land Securities that get a large chunk of their business from retailers.

"The first half of 2019 has been challenging for Intu," Chief Executive Matthew Roberts said in a statement.

Intu said it expects like-for-like net rental income at a similar level for the rest of the year and estimated the impact of administrations and CVAs on net rental income at 4.3 percent in the first half of the year, with 71 stores closed.

In a sign of the challenges Intu faces, clothing retailer Next said it was negotiating lower rents for its stores.

"When the leases are coming up for renewal we are seeing significant reductions in rent, which is allowing us to keep stores open which would otherwise have to close if the rent had not come down," Simon Wolfson, CEO of Next, told Reuters. The company upgraded its sales and profit forecast on Wednesday.

Intu, which has been looking to preserve cash and reduce its debt by selling assets, also said it has cut around 10 percent of management roles since the end of June, saving 5 million pounds in cash annually.

The company, which owns the Trafford Centre in Manchester, said it would not pay a dividend for the time being to retain cash within the business.

By Tanishaa Nadkar, Noor Zainab Hussain and Paul Sandle; additional reporting by Samantha Machado; editors: Shounak Dasgupta, Saumyadeb Chakrabarty and Deepa Babington.