Hammerson reports that, for the first six months of 2016, its EPRA net asset value rose by 2.4% to 727p. Adjusted EPS grew by 0.7p or 5.1% to 14.3p. The interim dividend was increased by 6.3% to 10.1p.
Their properties produced a return of 2.9%, 0.5% ahead of the industry benchmark. Within this, their French properties returned 5.1% and premium outlets returned 5.7%. The UK investment portfolio returned 1.1% and the development portfolio returned 5.6%.
Like for like net rental income grew by 2.1% – 2.8% in the UK shopping centres and 1.9% in their French shopping centres. The UK retail park portfolio saw income rise by 1.2%. Occupancy slipped to 97.2% from 97.7% at the end of 2015.
Their weighted average cost of debt was lowered to 3.2%; at the end of June the LTV was 40%.
Hammerson say that, within the UK shopping centre portfolio during 2016, they signed a number of key leasing deals with international brands, luxury operators and new catering offers. Highlights were five new restaurants at Cabot Circus including Côte, Brasserie Blanc and the UK’s first L’Osteria, a New Look Men store at The Oracle and Smiggle’s and Tortilla’s first Scottish stores at Silverburn. Brent Cross also celebrated its 40th anniversary year by welcoming three international brands: Urban Decay, Tesla Motors and Smiggle.
Consumer confidence has been subdued during the first half of 2016, and retail sales at their centres fell by 0.8%, calculated on a same centre basis. Sales performance by centre has been mixed with the poor weather hampering summer fashion sales, whilst technology and sports sales have seen healthy growth. Three centres reported declining sales, whilst the remainder achieved year-on-year increases. Footfall levels were 0.3% higher than 2015, however this included a 0.2% reduction in customer numbers in the first quarter of 2016 with growth of 0.9% returning in the second quarter. The occupational cost ratio was virtually unchanged at 19.3%. At 30 June 2016, there was only one tenant in administration representing GBP0.2 million of income.
In France, on a like-for-like basis net rental income increased by 1.9% in the first six months of the year. Les Terrasses du Port was the strongest performing centre with higher gross rental income and reduced year-on-year marketing expenditure as the centre matures following its opening in 2014. Non-rental income from car park and commercialisation activities continues to grow. In 2016, this increased to GBP2.7 million, reflecting like-for-like growth of 9%.
Occupancy levels were marginally lower than at the beginning of the year at 96.3%, compared with 96.9% in December 2015 and increasing ERVs remains challenging with growth of 0.1% during the first half of the year. A total of 62 units are in administration across the French portfolio, an increase of 13 during 2016. All of these units continue to trade and represent only 1.2% of the Group’s passing rent.
In Ireland they have just completed a major deal to expand their portfolio.
HMSO : Hammerson beats industry benchmark in H1