BRITISH property development and investment company Hammerson made £623 million (R12.46 billion) in disposals in the year to December 31, looking to reposition and face changes in shopping behaviour that have accelerated through the Covid-19 pandemic.
The London and JSE-listed owner of malls in the UK and centres in Europe has realigned its portfolio, significantly strengthened the balance sheet, and reset strategy for value creation focused on its prime urban estates, it said on Friday.
Hammerson is among many retail property landlords who are seeing a return of consumers to their centres, after pandemic-related closures and trading restrictions accelerated retail trends – including increases in buying online and reduced foot counts, and property values in line with weakening economies.
“We are already seeing tangible results from our strategy, with strong occupier leasing demand, reduced vacancies, improved collections, a lower cost base and clear path to value creation from our land bank,” chief executive Rita-Rose Gagné said on Friday at the release of annual results.
A final cash dividend of 0.2 pence per share was proposed, and an enhanced scrip dividend alternative of 2 pence per share.
The strategy for the 2022 to 2023 financial years included to continue to review the organisation and seek additional talent. There would be further right-sizing post disposals; office space would be right-sized; while the group would work on simplification, automation and digitalisation. The intention was also to reduce gross costs by 15 to 20 percent.
There were £503m of disposals contracted in 2021, including £70m from Silverburn, due to complete this month.
Net debt fell 19 percent to £1.8bn at December 31, and there was good liquidity of £1.5bn in undrawn committed facilities and cash. Loan-to-value stood at 39 percent, down from 40 percent in 2020. Average occupancy increased to 96 percent at the end of December, from 93 percent at the end of June 2021.
A further £120m disposal of Victoria, Leeds completed in 2022 would total disposals to £623m since the beginning of 2021.
There had been strong footfall recovery in all territories when restrictions relaxed, as well as strong demand for prime space.
Adjusted earnings increased 122 percent to £81m, benefiting from increased net rental income, a strong recovery in Value Retail earnings, and lower finance costs.
BUSINESS REPORT ONLINE