Hammerson rents and leases rise as consumer backdrop rallies

24th Jul 2014 08:53

- Net rental income up 4.6%, or 1.5% LFL- Leases signed at 7% above ERVAs the consumer backdrop improved in its markets, retail park investor Hammerson signed increased value of leases and lifted its income from tenants in the first half of the year. Including the newly opened Les Terrasses du Port, a "shopping and leisure destination" in Marseille, group net rental income from continuing operations increased 4.6% to £146.9m, or by 1.5% on a like-for-like basis.Chief Executive David Atkins said conditions for consumers were "improving in the UK and stabilising in France", and so Hammerson was providing the space for expanding retailers and allowing the company to grow rental values in selected locations.The FTSE 100 group cited a strong demand for high-quality retail property, with new rents secured of £12m for 67,800 square metres of space, meaning slightly less space was leased but at a higher value compared to the same period last year.Leases were signed at an average of 7% above estimated rental value (ERV) and 6% above previous passing rents, providing confidence in future income growth. Atkins said: "This has been an encouraging first half in which we have successfully opened Les Terrasses du Port, signed an increased value of leases at levels above ERV and previous rents, and made operational and financial improvements to our business."Five development schemes are in train, with construction started at new Leeds shopping arcade Victoria Gate in April, and planning approval received for major retail developments at Brent Cross, London, and Watermark WestQuay, Southampton."Global investors are increasingly seeking exposure to the benefits of high-quality retail assets, which has had a beneficial impact on capital values. We remain confident in our ability to deliver strong returns for shareholders," Atkins added.In the UK, the picture for sales at its shopping centres improved during the year, with tenant sales growth of 2.5% driven by fashion sales performing strongly during the year. UK footfall reduced by 1.5%, but consumers are spending more time and money at each visit to our centres it said.Shares in Hammerson were down 1.1% to 608.5p at 09:05 on Thursday.OH