Hammerson share price: UK sales offset ‘subdued’ French performance

By:
on Nov 10, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Monday, November 10, Real estate investment trust (REIT) Hammerson Plc (LON:HMSO) today released its results for the third quarter ended 30 September 2014. The FTSE 100–listed property group, which has assets in the UK and France, reported an improvement in the UK retail market since its half year release but revenues remained subdued in France.
*h*Improved UK conditions offset ‘subdued’ French market*h*
In the three months ended 30 September 2014, UK shopping centre sales rose 2.8 percent following a successful ‘Back to School’ campaign performance from retailers and menswear, catering and jewellery delivered strong growth.

Year to date UK sales rose 2.6 percent, while French shopping centres suffered a 2.8 percent decline in YTD sales, despite a 0.5 percent increase in footfall. The REIT enjoyed 37 percent y/y growth in total rent from new group lettings and a 21 percent increase in the total area of lettings.
*h*Company’s investment activity shows ambition ‘to accelerate future growth’*h*
“”Our investment activity during the period demonstrates our ambition to accelerate future growth””
“Our investment activity during the period demonstrates our ambition to accelerate future growth which will be further enhanced by our extensive development pipeline where we have continued to make good progress,” CEO David Atkins commented.

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During the period, Hammerson completed a successful share placing, raising proceeds of £399 million prior to expenses, which were principally used to acquire the remaining 40 percent interest in Highcross in Leicester, for £180 million. Hammerson share price: REIT to secure 100% ownership of Highcross The REIT also made further investments in the fast-growing outlet sector and provided additional capital for its development pipeline.

Atkins added: “Earlier in the year we saw signs of improvement in the UK retail market and since then we have experienced further growth in retailer sales, tenant demand and rental values in our winning retail locations.”
Long-term group leases were struck nine percent above estimated rental value (ERV) – UK retail +15 percent vs ERV; France retail +1 percent vs ERV – and 8.5 percent ahead of previous passing rents. According to the report, rent from new leases signed at UK shopping centres to Q3 2014 had already surpassed the total 2013 figure.

Overall occupancy across the portfolio was steady at 96.7 percent year-on-year as at 30 September 2014, with units in administration representing 1.2 percent of passing rent and unoccupied units accounting for 0.6 percent, lower that the 0.8 percent a year earlier.
*h*Hammerson share price declines*h*
Despite the positive quarterly report, Hammerson’ share price has fallen so far today. As of 14:08 GMT, the stock was trading 0.49 percent lower at 603.50p.
Of the 13 analysts projecting 12 month price targets for the FTSE 100-listed company for The Financial Times, the median target is 653.00p, with a high estimate of 710.00p and a low estimate of 530.00p.
According to the FT, as of July 21, 2014, the consensus forecast amongst 27 polled investment analysts covering Hammerson has it that the company will outperform the market.
**As of 14:08 GMT, buy Hammerson shares at 604.0p. **
**As of 14:08 GMT, sell Hammerson shares at 603.00p. **

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