Hammerson enjoys bumper year as it readies for £3.4bn Intu takeover

Hammerson update

Hammerson has reported a boost across the vast majority of its business operations, as it readies itself for a £3.4 billion takeover of Intu.

According to Hammerson’s audited results for the full-year period ending December 31, net rental income went up 6.9 per cent year-on-year from £346.5 million to £370.4 million.

Adjusted profit also increased 6.8 per cent year-on-year from £230.7 million to £246.3 million.

Meanwhile, Hammerson’s portfolio value grew 5.9 per cent from £9.97 billion in 2016 to £10.56 billion last year and its occupancy rate in 2017 grew to 98.3 per cent compared to the 97.5 per cent recorded in 2016.

However, like-for-like net rental income growth rose 1.7 per cent, just a few percentage points off from the company’s two per cent target.

At its UK and French shopping centres, net rental income grew 1.8 per cent and 2.6 per cent respectively, while UK retail parks’ net rental income took a 2.5 per cent hit.

The 1.1 per cent drop in retail sales recorded across Hammerson’s UK shopping centres in 2016 deepened last year, where it fell by 2.7 per cent.

While the 0.4 per cent increase in footfall is slightly slower than the 0.5 per cent footfall increase recorded in 2016, it still outperformed the UK industry benchmark which saw a drop of 2.8 per cent.

Across Hammerson’s French shopping centres, retail sales growth slowed dramatically from 3.1 per cent in 2016 to 0.1 per cent in 2017, and footfall went from a 2.8 per cent increase in 2016 to 1.6 per cent last year.

Despite this, Hammerson – which risks ejection from the FTSE 100 this week after its shares plunged 14 per cent since the announcement of its takeover bid for Intu in December – said its net asset value per share gree five per cent from £7.39 to £7.76 and it has declared an interim dividend of 14.8p per share, up 6.5 per cent from the prior year.

“In recent years we have actively rebalanced the weighting of our portfolio towards high footfall destinations in major cities across the UK and Europe and this has underpinned our strong financial success at a time of on-going structural change in retail,” Hammerson chief executive David Atkins said.

“By creating the space that today’s retailers need to showcase their brands, we achieved the highest level of lettings this year than in any other in Hammerson’s 75-year history and group occupancy is at a 17-year high at 98.3 per cent.

“This activity contributed to a 6.5 per cent uplift in earnings per share, which has risen on average by 8.3 per cent per annum over the past five years.”

Atkins added that the group was on track with its takeover of Intu.

“In line with our strategy, the transaction will further enhance our portfolio and operating platform, providing further opportunity to expand in higher growth markets,” he said.

“We are on track with our acquisition timetable and integration planning.

Hammerson owns shopping centres like the Bullring in Birmingham, Bicester Village, Cabot Circus in Bristol, Victoria Gate in Leeds, Westquay in Southampton and Brent Cross in north London.

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