Hammerson celebrates record year of leasing
Hammerson is celebrating a year of record leasing, with the real estate investment trust (REIT) completing 306 deals in 2023.
These deals represented £46m of headline rent, £29m at Hammerson’s share, split roughly evenly between new to portfolio brands, new concepts, social and entertainment offers, and renewals with existing occupiers.
Hammerson said that rental levels have rebased and that it is driving growth with permanent deals signed 12% ahead of estimated rental value, and 37% ahead of previous passing rent, equating to an additional annualised passing rent of £7m on its £179m flagship rent roll.
The increase in visitors seen at the REIT’s assets in 2022 continued into 2023, with footfall growing by 3% year-on-year. Whilst footfall remained lower than pre-pandemic levels, it was on average less than 10% lower than in 2019. Average dwell time also increased, up by 5% to 88 minutes.
Hammerson said that total sales and sales densities have risen by mid-teens percentages since 2019, with evidence that repurposed space and new concepts outperform that which it is replacing.
The REIT said that consumer spending “continues to be resilient”, with an improved outlook for 2024, adding that despite the cost-of-living crisis, savings built during the pandemic, high employment, and wage growth ahead of inflation have helped underpin continued consumer spend. In 2023, Hammerson recorded a like-for-like sales increase of 1% across its assets.
By the end of 2023, the REIT’s flagship portfolio occupancy remained at 95%, broadly flat year-on-year.
Rita-Rose Gagné, chief executive of Hammerson, said: “Our city centre destinations are in high demand. This year we delivered a positive performance across our key strategic, operational and financial metrics. Like-for-like gross rental income was up 6%, following another record year of leasing. Occupancy remains strong and footfall and sales were up again. We’ve strengthened our operational platform, whilst reducing costs by 14%. As a result, adjusted earnings rose 11% to £116m, whilst net debt was down 23%, with ample liquidity.
“Over the last three years, we have delivered against all strategic milestones. We now have a core portfolio focused on urban locations which are evolving into my vision: vibrant, 24/7 multi-use estates. These destinations are fast growing, and part of the fabric and infrastructure of the cities in which we operate.
“Whilst our eyes are open to the current macro-economic environment, our occupiers are thriving and our visitor numbers are on the rise in our realigned portfolio. We are reaping the rewards of the investments we are making in our core portfolio alongside best-in-class occupiers, which underpins the high levels of demand for our space. We expect this trajectory to continue in the year ahead. We have a strong pipeline of leasing and repurposing opportunities. There is still more for us to do, but we are now entering a time where having the capability to invest and operate with discipline and conviction will be rewarded.”