Asset management drives Hammerson
Published: 15 February, 2016
Rental growth returns but Croydon scheme slips again
In its full-year results for the 12 months ended 31 December 2015 Hammerson reported strong income performance with ERV growth of 2.8 per cent at UK shopping centres reflects growing polarisation in demand for high-quality retail space in prime locations. In all 400 lettings totalling 1.46m sq ft driving group like-for-like net rental income growth of 2.3 per cent.
The outlet mall portfolio saw exceptional sales growth rates with brand sales growth of 11 per cent at in the Value Retail portfolio and 10 per cent in the VIA Outlets portfolio. Hammerson has moved to increase its exposure to the sector spending £45m to buy Festival Park in Palma da Mallorca and to increase its stake in Kildare Village in Ireland.
The year saw the completion of 700,000 sq ft of new space including Le Jeu de Paume in Beauvais, and next-generation shopping park, Elliott’s Field, Rugby. Victoria Gate, Leeds and WestQuay Watermark, Southampton are both on-track for opening in the next year and Hammerson reports strong letting progress.
However the redevelopment of the Whitgift Centre in Croydon, in a joint venture with Westfield, has slipped again due to the protracted site acquisition process and opening is not now expected until 2020/21, the same year that the 1m-sq ft extension to Brent Cross is due to open.
Chief Executive David Atkins said: “2015 was a strong year for the business, with our assets well placed to take advantage of improving consumer confidence and growing retailer demand for space in prime regional destinations, resulting in meaningful ERV growth. A clear focus on our strategic priorities has delivered strong earnings growth of 13 per cent and supports a five-year track-record of 8 per cent compound growth per annum.
“We continue to recycle capital into assets best positioned to deliver value creation, with the acquisition in Ireland, Grand Central and Festival Park aligned with our strategy to own and manage prime retail destinations across Europe. Looking ahead, whilst we recognise the global economic and political uncertainties, we remain confident that the business will continue to deliver sustainable, attractive returns.”