UPDATE: Hammerson’s net asset value has increased 4.7% to £6.68 a share in the first six months of the year according to their interim results, despite a fall in total returns across the portfolio.
Total returns for the six months to the end of June fell to 5.7% from 6.9% for the period the year before.
In part this was driven by a reduction of 130bps in the capital returns on the portfolio to 3% as the portfolio climbed £200m to £7.9bn by the end of the quarter.
David Atkins, chief executive of Hammerson, said, however, that capital growth was not the focus of the company: “We are running our company for the long term and our retail focus is about consistent underlying growth and it is growth in income which we think provides a much more resilient performance.”
Rental income across the groups holdings, however, increased by £8.6% to £159.5m including all the new assets brought on board in the period. Like-for-like the growth rate was more steady, at 2.1%.
Leasing activity was responsible for bringing in returns 2% above the estimated rental value within the portfolio.
An increase in the portfolio value, and the refinancing of various facilities helped lower the gearing in the company to 33% LTV.
Gross profit across the group was down year-on-year, falling 9.2% to £329.4m. Adjusted profit, excluding revaluations was, however up from £87.8m for the six months to the end of June 2014 to £108.2m this year.
The performance of the company appears to be a vindication of the plans outlined by Atkins in his interview with Estates Gazette earlier this year, in which he detailed plans to cut costs and focus on the high-end retail parks that the company has invested in.
The company expects revenue growth in the coming year to improve further due to the expected completion of a number of projects including extensions to their Value Retail premium retail parks.
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