Hammerson shareholder pushing for strategy change - report

4th Apr 2023 11:44

(Sharecast News) - Shopping centre owner Hammerson is reportedly facing demands from its biggest shareholder to accelerate asset sales and resume dividend payments ahead of its annual meeting next month.

According to Sky News, Lighthouse - the investment vehicle of former Hammerson director Desmond de Beer - has tabled resolutions to appoint two new board members amid simmering discontent over its strategy.

In a letter published in Hammerson's annual report, Lighthouse, which holds a near-23% stake in the Brent Cross-owner, said it did "not have confidence in the Hammerson board as currently constituted, having regard to the operational and strategic weaknesses reflected in Hammerson".

De Beer, who quit the company's board last October, expressed unhappiness at its record of reducing administration costs.

"Relative to the size of its managed portfolio, Hammerson's administration costs have increased and objectively are high," Lighthouse said. "This is a matter Hammerson can rectify in the short term through disciplined management."

Lighthouse added that Hammerson, led by CEO Rita-Rose Gagne, had shifted its focus "away from its core proposition as a retail REIT [real estate investment trust]".

"Despite owning world-class malls which continue to perform well, Hammerson trades at a discount to net asset value of over 50%," it added.

"Hammerson is comprised of three divisions: malls, Value Retail and developments. Lighthouse is of the view that Hammerson should dispose of its investment in Value Retail, right-size its exposure to developments and reduce administration costs significantly."

A spokesperson for Hammerson said: "Lighthouse's proposals are unnecessary, distracting and value destructive. It is the board's view that neither nominee has the experience or skills that will be additive to our board and it would not be beneficial to appoint them.

"The board is confident that the strategy and leadership team is the right one and our performance clearly demonstrates strong strategic, operational and financial progress. 2022 was another year of delivery with like-for-like gross rental income of 8% and adjusted earnings up 60% year-on-year.

"2023 is another important year in the continuing transformation of the Group as we focus on execution and create a sustainable platform fit for the future."