- Huw Hughes |
British property giant Hammerson has announced plans to raise 825 million pounds as it looks to mitigate the financial impact of Covid-19.
The company, which owns Bullring shopping centre in Birmingham and Brent Cross centre in London, is looking to raise 552 million pounds through a fundraise and 274 million pounds through a sale of its 50 percent stake in VIA Outlets to its joint venture partner APG.
It comes as physical retailers struggle to recover following months of store closures and an unprecedented hit to sales. Shopping centre operators like Hammerson have been hit hard by huge slumps in rent collections. For the six months to 30 June, Hammerson’s net retail income plummeted 44 percent to 87.3 million pounds.
Hammerson to overhaul leasing model
“Today we have announced a series of transactions to recapitalise the business and reduce leverage by a quarter. This will help us to deal with these unprecedented conditions while enabling us to reposition Hammerson further,” CEO David Atkins said in a statement. “Looking forward, we will continue to dispose of assets and recycle capital from across the portfolio as we create a business focused on flagship destinations and mixed-use City Quarters over the medium term.”
Atkins noted that in recent weeks there has been an “encouraging increase in footfall” as cautious shoppers return to the high street. The company said Monday that since reopening its flagship destinations across Europe, footfall has continued to pick up and its UK Q3 rent collection - excluding monthly payments and deferrals - is now above 30 percent.
Atkins also spoke about plans to overhaul the group’s leasing model. “The pandemic has exacerbated structural shifts in retail, exerting further pressure on both property owners and brands, and provided further evidence that the UK's historic leasing model has served its time,” he said.
“It is outdated, inflexible and needs to change. We are introducing a new UK leasing approach - one that is simpler, reflects an omnichannel retail environment and rewards positive performance on both sides. It will deliver a sustainable, growing income stream and we are in initial discussions with retailers and anticipate introducing the first of the new leases later this year.”
Photo credit: Grand Central, Hammerson