Hammerson, the commercial property giant known for its ownership and operation of popular malls like the Bullring and Brent Cross, has reported a significant impact on its tenants due to the ongoing pandemic. The company announced that it has only managed to collect 41% of the rent owed for the first quarter of the year, reflecting the ongoing struggle in the retail sector caused by enforced closures and lockdown restrictions. However, this comes as no surprise considering the challenging market conditions that have persisted since October.

Hammerson disclosed that it is currently owed £61.5 million in rental payments for the first quarter, but has only received £28.8 million so far. The collection of rent from its non-office Central London estate was particularly low, with only 29% collected compared to the previous year’s 87%. Additionally, the company’s regional retail portfolio witnessed a decline, with only 36% of rent collected, compared to 90% in the previous year.

One of the main contributing factors to the decline in rent collection cited by the company is the limited number of open sites. Due to the nature of the businesses operating in Hammerson’s properties, which include essential retailers, non-essential stores offering click & collect services, and restaurants and cafes providing deliveries and takeaways, only 25% of its UK sites were open in the first weeks of January. Consequently, this has led to a significant decline in footfall, particularly in its flagship locations across the UK and Ireland.

Even before the introduction of tier systems and national lockdowns in 2020, Hammerson’s city-centre locations experienced a substantial decrease in footfall, dropping to just 60% of the prior year’s levels. However, the company did observe some positive signs during the Christmas trading period, as footfall started to recover and reached over 60% of the previous year’s numbers in city centre-focused flagships and 100% for retail parks. During this time, up to 75% of occupiers in the UK were open or offering click & collect services.

Despite these ongoing challenges, Hammerson remains optimistic about its performance during periods when its shopping villages are open and when its virtual shopping service is available. However, the company currently faces the closure of over half of its shopping villages. In order to mitigate some of the losses resulting from low rent collection, Hammerson announced in August that it planned to raise £551.7 million through a rights issue and sell its 50% stake in Via Outlets.

Furthermore, the company recently announced the departure of its chief finance officer, James Lenton, who will be stepping down from his role after just 15 months. This decision comes as Hammerson continues to navigate the difficult market conditions caused by the pandemic and the subsequent impact on its tenants’ businesses. Nevertheless, despite the challenges lying ahead, Hammerson remains committed to finding ways to adapt and strengthen its operations in the face of adversity.

Useful links:

Hammerson Official Website
Bullring Shopping Centre