// Hammerson swings to loss of £319.8 million in the six months to June 30
// On an adjusted basis, profits were down 10.5% to £107.4 million
// Net rental income dropped 12.3% to £156.6 million.
Hammerson has unveiled stinging half-year losses as its portfolio of shopping centres slumped in value amid challenges plaguing the retail industry.
The shopping centre giant swung to a loss of £319.8 million in the six months to June 30, compared with a £55.7 million profit in the same period last year.
On an adjusted basis, which is Hammerson’s preferred measure, profits were down 10.5 per cent to £107.4 million.
READ MORE:
Net rental income dropped 12.3 per cent to £156.6 million.
The headline loss was due to a £423.4 million net revaluation loss on its property portfolio in the first half, as continuing market uncertainty and a slowdown in leasing affected value, especially in the UK.
More than half of this was down to its flagship shopping destinations in the UK, which had a revaluation deficit of £266 million.
In France, there was a revaluation loss of £71 million, while the Irish portfolio was down by £30 million.
However premium locations produced a revaluation surplus of £111 million.
Rental income on a like-for-like basis was down 0.1 per cent.
For its UK shopping centres, the decline was steeper at 6.8 per cent thanks to a wave of CVAs and administrations from retailers leaving shops empty.
“The UK retail landscape is undoubtedly challenging and traditional high street fashion is under pressure,” chief executive David Atkins said.
“However, our focus on shifting our line-up towards categories with greater customer appeal and rental growth potential has resulted in over 90 per cent of new leasing to leading consumer and food and beverage brands.”
Hammerson also said it had achieved 90 per cent of its target to sell off £500 million worth of assets.
This included a £423 million deal with AXA IM Real Assets for a 75 per cent stake in Paris’ Italie Deux shopping centre, which was announced alongside the results this morning.
“Our absolute priority remains to reduce debt,” Atkins said.
“We stated our intention to achieve over £500 million of disposals in 2019 and even in this tough environment where deals are taking longer to transact, we are now most of the way there.
“We will continue to pursue additional sales throughout 2019 and into 2020 to further strengthen our balance sheet.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
