Hammerson, the UK-based commercial property company, has sought the assistance of management consultants McKinsey & Company as part of its ongoing strategic review. This move comes in response to the significant changes that have occurred in the physical retail landscape in the UK over the past year.

Rita-Rose Gagné, the newly appointed CEO of Hammerson, has chosen McKinsey to provide guidance on the company’s strategy. A spokesperson for Hammerson explained that the decision to seek external support is a common practice during a strategic review.

In addition to enlisting external advice, Hammerson has made important appointments within its management team. Harry Badham has recently joined as the chief development and asset repositioning officer. He will be overseeing the development teams responsible for “destination repositioning” projects in the UK, Ireland, and France. This appointment follows the recruitment of a new chief financial officer last month.

Furthermore, Hammerson has recently completed its exit from the retail park sector by selling a portfolio of seven retail parks to Brookfield for £330 million. The company is now focusing on repositioning its assets and improving its financial performance.

Investors can expect an update on the progress of the strategic review from CEO Rita-Rose Gagné in early August when Hammerson publishes its half-year figures. This update will provide stakeholders with a clearer understanding of the company’s future plans and direction.

In addition to these developments, Hammerson has introduced a real estate sustainability-linked bond worth €700 million (£600 million). This move is part of the company’s efforts to reshape its existing debt profile and align its financial and sustainability objectives.

The past year has presented significant challenges for Hammerson, resulting in a considerable decrease in net rental income and UK asset values. Factors such as the restructuring of tenant deals and a higher provision for bad debts have contributed to a 49% decline in net rental income, amounting to £157.6 million. Additionally, the closure of its shopping centers during the Covid-19 lockdowns has led to a 29% decrease in the value of its net assets. Consequently, the company’s annual losses have more than doubled, highlighting the impact of the pandemic on its properties and rental income.

In conclusion, Hammerson’s decision to engage McKinsey & Company for its strategic review demonstrates the company’s commitment to adapting to the ever-evolving retail landscape. Through key management appointments and the launch of a sustainability-linked bond, Hammerson is taking proactive measures to enhance its financial performance and align with its long-term goals. Investors are eagerly anticipating the August update to gain valuable insights into the company’s future plans.

Useful links:
1. McKinsey & Company
2. Hammerson