Vibrant city centre shopping lifts Hammerson to a record year

​With its city centre destinations “in high demand”, landlord Hammerson reported a record year of leasing Thursday, leading to an 11% rise in adjusted earnings to 31 December 2023.

The malls giant, whose extensive portfolio includes Birmingham’s Bullring and Dundrum in Dublin, said it saw a “positive performance across all key strategic, operational and financial metrics”.

The group completed 306 lettings across the year, generating £46 million of headline rent, up 23% on a like-for-like basis. Permanent deals signed were 37% above the previous passing rent  and 12% above the estimated rental value (EVR) for the space, it said.

The company also reported encouraging footfall and sales numbers across its centres, with footfall up 3% year-on-year, dwell time up 5%, and like-for-like sales up 1% in its UK assets.

This resulted in adjusted earnings growth of 11% to £116 million with like-for-like gross rental income rising 6%, and net rental income up 4%.

The group’s portfolio valuation however, was down 2.6% to £4.7 billion. Disposals during the year resulted in a reduction in net debt of 23% to £1.326 billion. The balance sheet has been further strengthened since the year-end with the sale of Union Square shopping centre for £111 million announced just this week.

The company continued to make headway with its cost reduction programme, with gross administration cost down 14% year-on-year bringing total cost reduction since 2020 to 24%. The company has guided a further 10% cost reduction in 2024.

As for its outlook, company said: “City centres remain the dominant locations for commerce and lifestyle. Our destinations are in high demand by occupiers and visitors. The importance of a physical presence in a digitally-integrated strategy for best-in-class operators is undeniable. Over time, we have a unique opportunity to complement our retail core with a broader mix of uses by repurposing existing space and unlocking value on adjacent land”.

Chief executive Rita-Rose Gagné added: “Over the last three years, we have delivered against all strategic milestones. We now have a core portfolio focused on urban locations which are evolving into my vision: vibrant, 24/7 multi-use estates. These destinations are fast growing, and part of the fabric and infrastructure of the cities in which we operate.

“Whilst our eyes are open to the current macro-economic environment, our occupiers are thriving and our visitor numbers are on the rise in our realigned portfolio. We are reaping the rewards of the investments we are making in our core portfolio alongside best-in-class occupiers, which underpins the high levels of demand for our space.  We expect this trajectory to continue in the year ahead.”