Victoria Gate owner sees losses widen
RETAIL PROPERTY giant Hammerson has seen its losses deepen dramatically as the shopping centre owner sold off sites to boost its balance sheets.
The owner of Victoria Gate in Leeds dived to a £573.8m pre-tax loss in the year to December 31, widening from a £173.3m loss in 2018, as it received lower rental income.
Hammerson said occupancy levels remained high, but the firm has seen like-for-like rental income slide 6.7 per cent as it was hit by retailer administrations and restructurings.
During the year, the firm saw 33 of its retailer partners enter administrations or undergo a Company Voluntary Arrangement (CVA) restructuring deal, affecting 94 units across Hammerson sites.
Nevertheless, occupancy remains high, with 97 per cent of units filled, although the firm saw new leasing volumes dip, generating £11.2m in income in 2019 compared to £14.4m in the previous year.
Earnings were impacted by the firm’s disposals programme, which generated £542m during the year, surpassing its £500m target.
Last week, the firm also announced its largest disposal in a decade as it sold its nine remaining retail parks for £455m.
Hammerson said it will maintain its focus on reducing debt during the current year amid an “uncertain” outlook for the UK retail market.
David Atkins, chief executive of Hammerson, said: “We have taken decisive action over the past 12 months to reduce debt and significantly reshape the portfolio.
“Against a challenged retail and investment backdrop, we have exceeded our 2019 disposal target, exited the retail parks sector as we said we would and reduced debt by a third. This delivered nearly £1bn of transactions in the process.
“In strengthening our balance sheet further, we will create a more resilient business and also generate significant liquidity which could, at the appropriate time, be deployed to create enhanced returns for shareholders.
“The magnitude of the challenge facing UK retail is significant.
“However, as brands look to optimise their store estates and strike the right balance between online and physical retail, the best destinations continue to be highly relevant – this is highlighted by the rise in visitor numbers across all our regions.”
The Victoria Gate shopping centre opened in 2016.
We have taken decisive action over the past 12 months.