Ham­mer­son to shake up rents af­ter slump­ing to £1bn loss

The Daily Telegraph - Business - - Business - By Rachel Mil­lard

SHOP­PING cen­tre owner Ham­mer­son is plot­ting a shake-up of rent charges as it bat­tles to sur­vive af­ter plung­ing to a £1bn loss.

The Birm­ing­ham Bull Ring owner could tie rent to the sales which shops make, as part of an at­tempt to help ten­ants cope with a cat­a­strophic slump in foot­fall, while en­sur­ing it does not miss out fi­nan­cially.

David Atkins, the firm’s chief ex­ec­u­tive, un­veiled the over­haul as Ham­mer­son posted dis­mal half-year re­sults, in­clud­ing an 8pc slump in the value of its port­fo­lio.

He also an­nounced a £552m rights is­sue fundrais­ing and £274m sale of its stake in VIA Out­lets, a chain of de­signer sites on the con­ti­nent. Ham­mer­son is fight­ing to pay down debts of £3bn.

The com­pany al­ready al­lows some shops to pay rent based on their turnover, but is con­sid­er­ing a wider ex­pan­sion of this sys­tem to re­place the old fixed quar­terly costs. It could also link pay­ments to click-and-col­lect sales to en­sure a cut of in­ter­net rev­enue. Stores have re­peat­edly called for a change in how rents are col­lected, claim­ing that they strug­gle to pay bills which date from the pre-in­ter­net age be­cause sales have been hoovered up by on­line ri­vals.

Mr Atkins said: “The UK’s his­toric leas­ing model has served its time. It is out­dated, in­flex­i­ble and needs to change.

“We are in­tro­duc­ing a new UK leas­ing ap­proach – one that is sim­pler, re­flects an om­nichan­nel re­tail en­vi­ron­ment and re­wards pos­i­tive per­for­mance on both sides.

“It will de­liver a sus­tain­able, grow­ing in­come stream and we are in ini­tial dis­cus­sions with re­tail­ers and an­tic­i­pate in­tro­duc­ing the first of the new leases later this year.”

Shares sank 11pc to 47.4p in late trade, valu­ing the com­pany at £384m. It means shares have fallen 83pc since the start of the year, in a boost for a string of short-sell­ers bet­ting on a slump in the value of the busi­ness.

Shop­ping cen­tre own­ers have been hit hard by the pan­demic af­ter ten­ants were forced to close, starv­ing land­lords of rental in­come. Ham­mer­son’s ri­val Intu went bust ear­lier this sum­mer.

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