// Hammerson to raise £552 million through fundraising while selling off assets worth £274 million
// This will provide a total of £825m for the shopping centre giant
// The property giant aims to alleviate the disruption caused by the coronavirus crisis
Hammerson has said it plans to raise £825 million through a £552 million fundraise and £274 million sale of assets in an effort to offset “the extraordinary disruption caused by Covid-19”.
The shopping centre giant will bolster its financial position through a proposed rights issue, as well as the sale of the company’s 50 per cent stake in VIA outlets, bringing the combined £825 million cash influx.
Hammerson saw its net retail income in the first half of the year drop by 44 per cent to £87.3 million due to forced closures, reduced rental collections and agreements, and administrations as a result of Covid-19.
READ MORE: Hammerson confirms it is scrambling to raise cash
Meanwhile its adjusted profit dropped by 84 per cent in the first half of the year to £17.7 million.
As well as the proposed fundraising, Hammerson plans to introduce more flexible leasing models and renegotiate rent prices.
Many retailers, including Sir Philip Green’s Arcadia have asked for a “rent holiday” where they’ve withheld rents as the Covid-19 pandemic impacts trading.
Fellow shopping centre Intu, the owner of Manchester’s Trafford Centre, fell victim to Covid-19 after collapsing into administration in late June.
“Today we have announced a series of transactions to recapitalise the business and reduce leverage by a quarter,” Hammerson chief executive David Atkins said.
“This will help us to deal with these unprecedented conditions while enabling us to reposition Hammerson further.
“Looking forward, we will continue to dispose of assets and recycle capital from across the portfolio as we create a business focused on flagship destinations and mixed-use City Quarters over the medium term.
“The extraordinary disruption caused by Covid-19 on the retail property sector, the economy and society as a whole is reflected in these half year results.
“However, in recent weeks we have seen an encouraging increase in footfall as confidence begins to return amongst visitors to our flagship destinations.
“The pandemic has exacerbated structural shifts in retail, exerting further pressure on both property owners and brands, and provided further evidence that the UK’s historic leasing model has served its time. It is outdated, inflexible and needs to change.
“We are introducing a new UK leasing approach – one that is simpler, reflects an omnichannel retail environment and rewards positive performance on both sides.
“It will deliver a sustainable, growing income stream and we are in initial discussions with retailers and anticipate introducing the first of the new leases later this year.”
Separately, Hammerson said that Atkins will step down from his role by next spring.
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