Shopping centre giant Hammerson is to strengthen its board and accelerate its disposal programme after reporting a loss in 2018 as the shift in consumer behaviour intensifies.
Reporting its numbers for the year to the end of December 2018, the group said it would aim to sell off a further £500m-worth of assets by the end of the current financial year, on top of the £570m it generated in sales during 2018.
Currently looking to redevelop The Square retail mall in Birmingham, Hammerson has established a dedicated investment and disposals committee to oversee the downscaling and plans to beef up its senior board, having named Odeon cinema chain boss Carol Welch as a non-executive director.
She is due to start at the beginning of March and the company said that it plans to name two more non-execs during the year.
Hammerson said it would not be committing to any new major developments in the current year, but would press ahead with existing schemes, including Brent Cross, the proposed Whitgift Centre redevelopment in Croydon and the Goodsyard site in Bishopsgate in the City of London.
In a statement following its results announcement, it said: “Given our focus on reducing debt during 2019, we do not expect to commit to any major projects until markets stabilise.”
It put on hold the Brent Cross work in north London, due to be carried out by Laing O’Rourke last summer, with Hammerson, which is developing the scheme with joint venture partner Argent Related, saying of the scheme that it “continues to review the optimal mix of uses for the Brent Cross extension in light of evolving market conditions”.
The company also said that it was “currently reviewing the [Croydon] scheme to ensure it responds to changing retailer requirements and is appropriate for the future” while the developer added that it was hoping to get a decision on its plans for the Goodsyard site, which it is developing with Ballymore, from London mayor Sadiq Khan later this year.
RPA Perspective Posting a pre-tax loss of £267m versus a £412m profit in 2017, Hammerson said of its results that net debt at the end of the year was £3.4bn and that it was targeting to reduce this net debt figure to £3bn by the end of 2019.
David Atkins, Hammerson’s chief executive, said 2018 had been “a particularly tough year in the UK”, adding that what he called “a successful deleveraging programme” will best position Hammerson for the current environment and beyond.
Atkins added: “Disposals will also enable us to prove the inherent value of this business which we believe is not recognised in the current equity market.”
The company was a major player in the commercial offices space but several years ago chose to switch its focus purely to retail in the UK and France.
And to combat the effects of challenges within the retail market, Hammerson has launched its City Quarters initiative which includes plans to build 6,600 homes, 1,200 hotel rooms and 200,000 sq m of workspace next door to retail such as such as Martineau Galleries in Birmingham.
