Shopping centre owner Hammerson’s impressive turnaround continues, with 2024 annual results showing a record year of leasing, rental growth and valuation gains.
The company signed 262 leases covering 1m sq ft of space, generating annual headline rent of £41m at 56% above previous passing rent and 13% ahead of estimated rental value (ERV). This has seen occupancy among its centres in the UK, France and Ireland move from its Covid-19 low of 91% to over 95%. The company said that this is a level where rental tension is tangible with only a few available leasable units in most assets.
The company’s portfolio was valued at £2,659m at 31 December 2024, down from £2,776m, with UK values up 4.2% on a like-for-like basis to £915m, France up 1.5% to £964m but Ireland down 13.3% to £522m due to a 90 basis point outward move in yields. Foreign exchange translation losses amounted to £79m of the portfolio value.
EPRA net tangible assets (NTA) was down 27.2% over the year to 370p per share, primarily due to the losses it incurred with the sale of the Value Retail portfolio.
Adjusted earnings were £99m or 19.9p per share (2023: £116m, 23.4p), reflecting the impact of disposals. The company has recommended a final dividend of 8.07p per share for 2024 in line with the board’s new policy of 80-85% of adjusted earnings. The full year dividend is 15.63p, up 4%.
Net debt was down 40% year-on-year to £799m, resulting in a net debt to EBITDA ratio of 5.8x (2023: 8.0x) and an LTV of 30% (2023: 34%).
Operational highlights
Footfall was up 2% (+2.5m) year-on-year across the group, excluding assets being repositioned, with the UK up 2%, France up 4% and Ireland up 1% – all ahead of national benchmarks. A total of 170m people visited its destinations during the year (+600k). Meanwhile, sales were up 5% in the UK and 3% in France.
Black Friday, Christmas Eve and New Year’s Eve all saw year-on-year increases of between 10% and 12% for all flagship destinations, while footfall momentum in the final quarter was particularly impressive with UK footfall up 17% quarter-on-quarter, Ireland 16% and France 5%.
Rita-Rose Gagné, chief executive, commented:
“Following a transformative and successful year for Hammerson, we enter 2025 as a repositioned business. In landing the pivotal sale of Value Retail and completing our non-core disposals, we have generated £1.5bn of cash proceeds over the last four years, materially strengthening our capital structure, and enabling investment for growth in our high-quality portfolio.
“We have strategically realigned the business to benefit from structural market trends. First, cities are engines of economic growth, and we have concentrated our portfolio on exceptional assets in some of Europe’s fastest growing and most vibrant cities. Second, the flight to quality where occupiers want fewer and more productive stores in only these locations, enables us to attract leading global and local brand partners. Third, the physical experience has become more relevant for consumers and our brand partners, with at least 80% of all retail transactions touching a store.
“Investment in our destinations and our unique and specialist platform provides data-driven insights to curate the right product, placemaking and mix of brands. This platform is scalable and agile, driving tangible benefits with higher occupancy, leasing, footfall and sales above national benchmarks, whilst growing our catchment and market share. There is more to come.
“We are confident in our strategy and optimistic about the opportunity ahead for Hammerson. We continue to maintain a tight operational grip and are poised to deliver significant revenue and underlying earnings growth, with the full impact of our ongoing investments and acquisitions yet to be realised.”
