Hammerson hammered: enforced store closures hit rent collections

By

Nigel TAYLOR

Published
Jan 19, 2021

The knock-on effect of the pandemic on its tenants has hit commercial property giant Hammerson pretty hard. The Bullring and Brent Cross mall owner/operator admitted Tuesday it has collected just 41% of Q1 rents due from a retail sector reeling under enforced closures and lockdown restrictions.

No wonder it said Tuesday that "market conditions have remained challenging since our last update in October”.

The group said it was owed £61.5 million in rental payments for the first quarter of its financial year, but had only received £28.8 million.

It collected just 29% of rent owed from its non-office Central London estate, and 36% from its regional retail portfolio, compared to 87% and 90%, respectively, the previous year.

During the first weeks of this year to 17 January, Hammerson said it had just a quarter of its UK sites open, due to it housing ‘essential’ retailers, non-essential stores offering click & collect services, and restaurants and cafes providing deliveries and takeaways. 

The group said: “Footfall has declined in line with the introduction of new restrictions, particularly across UK flagships and Ireland”. 

Even before tier systems and national lockdowns were imposed towards the end of 2020, the group's city-centre locations still saw football drop to just 60% of levels seen a year before. 

On a brighter note, Hammerson said it had been encouraged by footfall recoveries during the Christmas trading period from 30 November to 24 December, following the easing of lockdown.

It also said the UK ops delivered a variable footfall performance with city centre-focused flagships peaking at more than 60% of the prior year, and 100% for retail parks. During this period, up to 75% of occupiers in the UK were open or offering Click & Collect.

The group, which also runs the Bicester Village designer outlet mall, said that over half of its shopping villages remain shut.

However, it added: “Performance has been robust during periods when villages have been open and the virtual shopping service has expanded strongly during periods of closure”. 

In August, Hammerson revealed it would tap investors for £551.7 million via a rights issue and planned to offload its 50% stake in Via Outlets. Both were viewed as an attempt to stem some of the losses from the low rent collection it had suffered as stores were forced to close amid lockdown restrictions.

Last week, Hammerson also announced that its chief finance officer, James Lenton, was stepping down from his role after 15 months in the job.