FINANCE UPDATE: Retail giant Hammerson saw rental values rise by 4.6% to £146.9m in the six months to 30 June, thanks to improving UK consumer sentiment.
Hammerson completed £12.1m of new leasing activity during the period, compared with £10.2m for the same period last year.
However, performance in the company’s French portfolio, which includes the newly opened, £400m Terraces du Port Shopping Centre in Marseille, was muted compared to that of the UK. Rents on the company’s UK portfolio rose by 2% during the period, but by only 1.1% in France, while retail sales rose by 2.5% in the UK, but declined by 2.4% in France.
“France is clearly behind the UK in its economic recovery, and consumer confidence is definitely weaker. However, the situation is stabilising, and will get better over time” said Atkins.
However, the 61,000 sq ft Terraces du Port, which opened last month, is now 98% let and has produced a 23% profit on cost.
The company’s pre-tax profit rose to £362.9m, from £80.8m the previous year, although this was driven mainly by a £289.7m portfolio valuation gain. The 4.3% capital value growth achieved during the period beat the IPD benchmark by 50 basis points.
After losing out to Land Securities for a 30% stake in Bluewater shopping centre in Kent last month, Atkins said that Hammerson would focus on development and asset management opportunities within its existing portfolio.
The REIT’s loan-to-value remained the same as the previous year, at 38% with gearing at 54%
JP Morgan maintained its “overweight” rating on Hammerson stock on the back of an improving retail environment in the UK. Liberum gave the stock a “hold” rating, but commented that the rental growth outlook for the company was “muted”.
sophia.furber@estatesgazette.com
