// Hammerson says its properties worth £6.34bn at the end of 2020 compared with £8.33bn a year earlier
// Net rental income in 2020 plunged 48.9% to £157.6m
// Adjusted profits fall 82.9% to £36.5m
Hammerson has written down the value of its shopping centres and stores by nearly £2 billion as Covid-19 saw rental income suffer the biggest fall in its history.
Bosses at property giant, which owns Birmingham’s Bullring and London’s Brent Cross, said its properties were worth £6.34 billion at the end of 2020 compared with £8.33 billion a year earlier.
Net rental income in 2020 fell 48.9 per cent to £157.6 million, with adjusted profits at the firm falling 82.9 per cent to £36.5 million.
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Hammerson’s UK portfolio was the worst affected, with flagship sites and retail parks suffering like-for-like declines of 51 per cent and 42 per cent respectively, compared to 18 per cent falls in France and 30 per cent drops in Ireland.
Drops in valuations were particularly hard for shopping centres – down 35.8 per cent – and retail parks were off by 23.3 per cent.
However, Hammerson’s discount outlet retail parks only fell 6.2 per cent.
Commercial landlords are contemplating a difficult future with the shift to home-working and most companies expect staff to no longer commute five days a week, making city centres less attractive to tenants.
“By any measure, 2020 was an unprecedented year with every business and household affected by Covid-19,” Hammerson chief executive Rita-Rose Gagne said.
“As our results show, Hammerson was hit hard. The retail sector, already in the grip of major structural change, has been significantly impacted by the restrictions imposed to tackle the pandemic, and we’ve also seen an increasing number of retail failures.
“Combined, this has resulted in the largest fall in net rental income and UK asset values in the group’s history.”
Gagne added she was hopeful for the future as lockdown restrictions ease and the vaccination rollout continues at pace.
“As a business, Hammerson provides the places and social infrastructure where people want and need to be, and I am confident it will have a vital role in shaping neighbourhoods and communities in the future,” she said.
The firm will also sell off more properties and confirmed it would end a joint venture on two shopping centres in France.
with PA Wires