Retail property developer and operator Hammerson says its business is now recovering from the pandemic-driven downturn as shoppers return to spend in-store. The company says most of the new leases it signs are now with non-fashion retailers.
Sales in stores in its centres were close to levels last seen in pre-pandemic 2019 throughout the first half of its financial year and overtook them in the second quarter. Footfall reached 90% of 2019 levels towards the end of the second quarter. Footfall and sales also recovered at its value retail sites, with spending per visit 7% above 2019 levels.
Leasing grew, with £10.5m in deals reached in the first half of the year. Headline rents were 31% above previous passing rents. More than half of those deals were to non-fashion retailers. Since the first half of 2021, 68% of deals have been outside the fashion sector. That may reflect the shift online that is particularly evident in fashion and footwear retailing. In June 2022, ONS figures suggest, 25.7% of UK clothing, footwear and textile retail sales were online, making this the sector – outside of non-store retailing – in which more sales are online than any other.
Across its flagship managed shopping centres, occupancy was stable at 95%, two percentage points higher than last year, while rent collection for its 2021 full-year is now at 94%.
The update comes as Hammerson this week reports adjusted net rental income of £86.5m in the six months to June 30 2022. That’s 1% down on the £87.2m it reported for the same period last year. Reported profits of £50.3m in the six months to June 30 were up from a loss of £375.5m last time. As of June 30, its net assets had grown in value by £55m to £2.8bn, although the value of its group portfolio had fallen by £86m to £5.3bn.
Hammerson chief executive Rita-Rose Gagné say the business made good progress in the first half of its year with footfall, sales occupancy and collections now close to 2019 levels, with a stronger tenant profile.
Gagné says: “We are a better, more resilient, and financially secure business as a result of the actions taken since the beginning of 2021. We are conscious of the potentially volatile environment ahead and remain focussed on delivering our strategy. We have identified a number of levers within our control to continue to create value. We see more opportunities ahead.”