Leading British Shopping Centre operator, Hammerson, is set to fund £825 million from a rights issue and the sale of its 50% stake in VIA Outlet to secure survival (and hopefully growth) during the current economic crisis of COVID-19, it said on Thursday.
Hammerson, owner of a number of large Shopping Centres including London's Brent Cross, Bullring, Cabot Circus, Centrale Shopping Centre, said it would reset the terms of its leases in the wake of the event to redeem rent owed by its tenants and due to a decline in footfall and the value of its properties.
Brent Cross Shopping Centre, London NW4
The pandemic sadly affected many UK and European retailers and retail landlords, which put Hammerson's competitor, Intu, into administration in June this year.
Hammerson is looking to raise £552 million from the planned rights issue, and £274 million from the sale of the stake in VIA Outlets, adding that it would increase the scope of its disposal programme.
Like many commercial landlords, rental income soared 44% to £87.3 million in the first half of the year, while adjusted profit plummeted significantly to £17.7 million from £107.4 million a year earlier.
Rowen Squibb from Why Media went on to say “Not much support has been in place for commercial property owners over the last six months and it is good news that great businesses like Hammerson have worked out a resolve inlight of challenges beyond their control. This should be greeted with relief by the press and for the UK and European City Centres, we can not underestimate the importance of businesses like Hammerson who play a major role in keeping our Cities alive”.
It said the deals, which are backed by two of its largest shareholders - APG and Lighthouse Capital - will bolster its financial position.
Shares in Hammerson, dropped to 80% so far in 2020, were down 12% (11am GMT) on the back of the news, the dilution would have been seen as a negative in the short term.
It now hopes to proceed with dividends in the second half of 2020.
Hammerson are focusing our portfolio on the highest quality flagship destinations and premium outlets in key cities across the UK and Europe. By applying our expertise and skills, we have significant opportunities to generate value for all stakeholders over the longer term.
ABOUT WHY MEDIA
Why Media is a reputable design, marketing, digital communications and PR agency offering tailored solutions to Shopping Centres both in the UK and Europe. Our company culture brings together ideas, innovation, communication and passion to deliver exciting campaigns, creative pieces and software to companies across the globe. These include the United Kingdom, Australia, Ireland, France and Spain. With extensive experience in delivering design and marketing services to a spectrum of companies including professional services, property companies, financial institutions and shopping centres. We understand the importance of communication, transparency and quality - All attributes that can be supported by our client feedback.