Shopping centre giant, Hammerson has posted full year results for 2018, which were impacted by a weaker investment market. UK property values fell during the second half of 2018 by 9.3%, the overall portfolio produced a 12 month capital return of 4.3%.
The 42-strong shopping complex group's net rental income stood at £347.5m, down 6.2% from £370.4m of the previous year, and adjusted profit came to £240.3m, a fall of 2.4% in like-for-likes.
However, strong performances came from premium outlets and Ireland with like-for-like NRI up 5.2% and 1.6% respectively, with exceptional brand sales growth of 8% across premium outlets.
The group's £5.6bn shopping centre estate is in the UK and in France, and the UK flagship destinations achieved record leasing levels, an increase of 7.5% in like-for-like.
David Atkins, Chief Executive of Hammerson, said, “2018 was a tough year particularly in the UK. Tenant failures, the structural shift in retail and a more considered consumer created a difficult operating environment, putting pressure on property values. Outside of the UK our destinations performed better with a strong contribution from premium outlets.
“We believe that a successful deleveraging programme will best position Hammerson for the current environment and beyond. Disposals will also enable us to prove the inherent value of this business – which we believe is not recognised in the current equity market.
“Having successfully achieved £570m of disposals in 2018, we are aiming to dispose of at least £500m in 2019. We remain committed to exiting retail parks over the medium term and are in active portfolio-wide discussions on transactions of over £900m, which would add further strength to our balance sheet.
“Over the longer term we will generate opportunities to create additional value through City Quarters, which will see us transform many of our city venues beyond pure retail into successful, thriving neighbourhoods. The job of creating flagship spaces is never done, but through expert management, innovation and investment we are confident in the future of Hammerson and in maximising value creation for shareholders.”