Shopping centre owner Hammerson have announced intentions to focus on flagship retail destinations and premium outlets as half year IFRS profit for the period was down 80.6% to £55.7m, which it blamed on “the net revaluation deficit on the group’s property portfolio of £40.1m in the first half of 2018, compared with net gains of £187.9m in 2017.”
Net rental income to 30 June 2018 was down 3% to £178.5m, compared to £184m for the same period in 2017.
Adjusted profit increased by 0.5% from £119.4m in 2017, to £120m in 2018.
As of 30 June 2018, the portfolio value for the company stands at £10.6bn, up 0.6% on the valuation to 31 December 2017 of £10.5bn. Group valuations were “stable with continued growth in premium outlets and Ireland offsetting a small-yield driven valuation decline in the UK.”
The value retail portfolio sales were up 6%, with Bicester Village trading well.
There was a small uplift in leasing volume across UK shopping centres to £6.8m, compared to £6.6m in the half year in 2017.
The company also reported that 104 units across the portfolio are in administration or are subject to Company Voluntary Arrangements (CVAs), with 87 of those units currently trading. This is expected to impact full year results by £5.8m - 1.5% of passing rent.
The company announced a disposal target of £1.1bn by the end of 2019, with almost £300m already achieved this year.
It was also announced that chief investment officer Peter Cole would retire in April 2019, and would be stepping down from the Board on 31 December 2018, alongside executive director Jean-Philippe Mouton.
David Atkins, chief executive of Hammerson, said: “Our results today demonstrate the resilience of our business. We are taking tough decisions and have absolute conviction in our ability to deliver. By reprioritising our capital deployment and repositioning our portfolio, we will accelerate future shareholder value and returns.
“Our customer and retailer offer will be amplified, and this includes a step change in our retailer line up. We will reduce the amount of floor space let to department stores and high street fashion as we actively focus on the latest consumer trends and take bolder steps to provide the best retail mix.”