Shopping Centre Giant Hammerson Seeks Funds and Flexible Leases to Survive Covid-19

  • Hammerson plans to raise £825m through fundraising and disposals
  • Net rental income dropped by 44% to £87.3m in H1
  • Only 72% of H1 2020 rent collected, 34% of Q3 rent due as of July 31st
  • Group occupancy maintained at 94%, despite 36 tenants entering administration or CVA
  • Portfolio value dropped by 8% from £8.3bn to £7.6bn
  • New leasing approach with flexible leases, rebased rents and omnichannel top-up element
  • CEO David Atkins: ‘pandemic exacerbated structural shifts in retail’
  • Initial discussions with retailers for new UK leasing approach

Hammerson, the shopping centre owner, plans to raise £825 million through fundraising and disposals as it navigates the impact of the coronavirus pandemic. The company reported a 44% drop in net rental income during the first half of the year, collecting only 72% of H1 2020 rent with 34% of Q3 rent due collected as of July 31st. Despite facing challenges, Hammerson maintained a high level of group occupancy at 94%, with UK flagships at 93%, French flagships at 94%, and Ireland flagships at 96%. However, 36 tenants entered administration or underwent a CVA during the period, affecting 88 units (out of 2,886) of which 49 continue to trade. The company’s portfolio value dropped by 8% from £8.3 billion to £7.6 billion. In response, Hammerson announced a new leasing approach that includes more flexible leases, rebased rents at affordable levels, and an omnichannel top-up element. CEO David Atkins said the pandemic has accelerated changes in retail and highlighted the need for a new UK leasing model. Initial discussions with retailers are underway to introduce the new leases later this year.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Hammerson’s financial situation during the pandemic, including details on rental income, occupancy rates, and plans for fundraising and lease changes. It also includes a quote from the CEO that adds context to their strategy moving forward.
Noise Level: 3
Noise Justification: The article provides relevant information about Hammerson’s financial situation during the pandemic and its plans to raise funds and adapt to changing market conditions. It also includes quotes from the CEO discussing the need for changes in the leasing model. However, it could benefit from more detailed analysis of the long-term implications of these changes and potential consequences for other businesses in the industry.
Financial Relevance: Yes
Financial Markets Impacted: Hammerson’s stock price and the retail property sector
Financial Rating Justification: The article discusses Hammerson, a shopping centre owner, raising funds and announcing new leasing approaches to cope with the impact of the pandemic on its business. This directly affects the company’s financial situation and the retail property sector as a whole.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: The article discusses the impact of the COVID-19 pandemic on a shopping center owner’s financial situation, but there is no extreme event mentioned in the last 48 hours. The pandemic is considered a major global crisis, but it is not an extreme event specific to this article.

Reported publicly: www.retailsector.co.uk