Hammerson hails in-store recovery as sales and footfall in shopping centres’ stores pick up

Hammerson's Brent Cross shopping centre is one of its leading locations. Image courtesy of Hammerson

Hammerson's Brent Cross shopping centre is one of its leading locations. Image courtesy of Hammerson

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%. 

Half-year figures

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.” 

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