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Feb 20, 2017
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Revaluation dents profits at mall owner Hammerson

Published
Feb 20, 2017

Property giant Hammerson had it tough in 2016 as the slowdown in footfall to locations such as the retail parks and malls in which it specialises ate into its profits.


Hammerson's property portfolio was revalued downwards - Hammerson



Pre-tax profit plunged 56% to £322.8m in the year to December 31 despite gross rental income from a premium portfolio rising to £251.3m from £236m.

What went wrong? Essentially, its property portfolio, which includes Bicester Village, the Bullring and Italie Deux in Paris, was worth less than it had been as an-almost £25m revaluation loss took it toll. In the previous year, it had benefitted from a more-than-£245m revaluation gain.

But investors did not seem to mind too much and the property giant’s shares rose in early trading in London.

Hammerson said that a polarising retail market is seeing retailers placing a premium on the best locations and its portfolio includes may of those.

It had a reasonable excuse for a slightly higher number of unlet locations (with lettings running at 97.5% from 97.7% a year earlier) as there were some unlet units at the recently completed Leeds and Southampton centres.

While the share price rise could have been as much about the company raising its dividend as anything else, analysts do seem to be upbeat on the firm’s prospects.

Physical retail is facing a perfect storm of e-commerce and m-commerce, do Hammerson’s premium locations do make it one of the likely winners among shopping centre operators.

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