TIDMHMSO
RNS Number : 8101B
Hammerson PLC
03 November 2009
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For immediate release 3 November 2009
Interim Management Statement for the period from 1 July 2009 to 3 November 2009
David Atkins, Chief Executive said:
"The period has seen a degree of confidence return to property markets, with
increased levels of investment activity leading to a firming of UK property
yields. In France, we have also seen encouraging levels of transactions, albeit
from a low base. This has been an active period for Hammerson in which we have
completed a number of property sales and made good progress on lettings in a
difficult market environment. We continue to advance the development pipeline
and are actively considering both property acquisitions and investment within
our existing portfolio."
Investment markets
Improvements in global financial markets, increased economic activity and low
interest rates have helped to increase demand for commercial property in the UK
and France. In France, transaction levels have increased but remain low in
absolute terms. In the UK a higher level of transactions has led to downward
pressure on yields and consequently evidence of improving valuations. However,
the market outlook remains uncertain, due in part to the high level of property
debt which needs to be refinanced over the next few years.
Occupational markets
The operating environment for retailers in the UK has remained challenging,
although in recent months consumer confidence has increased and fewer retailers
have gone into administration. There continues to be downward pressure on retail
rents, although this has been less marked for prime property and in locations
where vacancy levels are low. In France, despite falling retail sales, the level
of vacant space remains low, which has helped sustain rental levels.
In London and Paris confidence is returning to the financial and business
services sectors. In conjunction with lower rental levels this has led to
improved demand for office space. In London there are signs that, despite the
high level of vacancy, net effective rents are stabilising.
Operational update
We successfully opened Union Square, our major shopping centre development in
Aberdeen, on 29 October. Over 230,000 people visited the centre in its first
four days of trading. We were pleased to open the scheme with 76% of the rental
income let or in solicitors' hands. Union Square has attracted expanding
international retailers including: Apple; Hollister, an Abercrombie & Fitch
brand; Vero Moda and Zara. Other well-known occupiers include: Cult; H&M; Marks
& Spencer; New Look and Next. The scheme was awarded a BREEAM Very Good
environmental rating.
At 125 Old Broad Street in the City of London, 92% of the income is now let or
in solicitors' hands. At the adjacent office building, 60 Threadneedle Street,
this figure is now 83% following recent lettings to Berenberg Bank, Toronto
Dominion Bank and Universities Superannuation Scheme.
At Fife Central Retail Park in Kirkcaldy, we completed an 11,000 m² extension
which is fully let to tenants including B&Q, Mothercare and Toys R Us.
In line with our aim to refresh our shopping centres with new brands, we have
signed leases with a number of major retailers providing a point of difference
for consumers. Banana Republic will open its second UK store at Brent Cross,
London; Jamie's Italian, a Jamie Oliver branded restaurant, will open at The
Oracle, Reading; and Vero Moda and Jack & Jones have taken a unit at Highcross,
Leicester.
Occupancy in the Group's retail portfolio improved slightly to 95.6% at 30
September (30 June: 95.2%), however the overall occupancy rate in the Group's
investment portfolio was marginally lower at 92.4% (30 June: 92.6%), reflecting
the expiry of a lease to a major office tenant in Paris.
The total income from tenants in administration has reduced to GBP7.0 million
per annum at 30 September (30 June 2009: GBP8.4 million), or 2.3% of the group's
total passing rent. In our retail portfolio, 69 units out of a total of
approximately 1,600 in the UK were let to tenants in administration, and of
these, 36 are still trading. In France, there were 21 retail units in
administration with 16 units still trading. Our rent collection record remains
strong, with over 95% of the rent due at the end of September collected within
14 days.
We continue to recycle capital where appropriate. In the period we completed the
sales of Forum Steglitz, our last remaining property in Germany, Seacourt retail
park in Oxford, and two retail parks in France, raising an aggregate GBP122
million.
Following the completion of Union Square, our major construction projects have
now been completed. However, we continue to make good progress on our
development pipeline through site assembly, planning and design. This should
enable us to benefit from new developments as market conditions improve. In
Paris, we expect to start a redevelopment of our retail property on Rue du
Faubourg Saint-Honoré in early 2010 at a cost of around GBP30 million.
Financing
Borrowings were GBP2,195 million at 30 September 2009 and cash balances were
GBP96 million to give net debt of GBP2,099 million (30 June: GBP2,061 million).
Undrawn committed bank facilities at 30 September 2009 totalled GBP752 million,
with only GBP119 million due to mature by December 2011.
Conference call
There will be a conference call for investors and analysts at 08.00 GMT today.
To participate in the call, please dial:
+--------------------+--------------------+--------------------+--------------------+
| UK | 08081090700 |
+-----------------------------------------+-----------------------------------------+
| UK Local | 0203 037 9060 |
+-----------------------------------------+-----------------------------------------+
| International | +44 (0) 203 037 9060 |
+-----------------------------------------+-----------------------------------------+
| US | 1 866 966 5335 |
+-----------------------------------------+-----------------------------------------+
| Netherlands | 0 800 022 9132 |
+-----------------------------------------+-----------------------------------------+
| France | 0805 630061 |
+--------------------+--------------------+--------------------+--------------------+
For a replay of the conference call, please visit: www.hammerson.com
For further information
+--------------------------------------------+---------------------------+
| | |
+--------------------------------------------+---------------------------+
| David Atkins, Chief Executive | Tel: 020 7887 1000 |
| Simon Melliss, Group Finance Director | Tel: 020 7887 1000 |
| Morgan Bone, Director of Corporate | Tel: 020 7887 1009 |
| Communications | morgan.bone@hammerson.com |
+--------------------------------------------+---------------------------+
Financial information
The financial information contained in this statement is based on unaudited
management accounts for the three months ended 30 September 2009.
Forward-looking statements
This document contains certain statements that are neither reported financial
results nor other historical information. These statements are forward-looking
in nature and are subject to risks and uncertainties. Actual future results may
differ materially from those expressed in or implied by these statements. Many
of these risks and uncertainties relate to factors that are beyond Hammerson's
ability to control or estimate precisely, such as future market conditions,
currency fluctuations, the behaviour of other market participants, the actions
of governmental regulators and other risk factors such as the Company's ability
to continue to obtain financing to meet its liquidity needs, changes in the
political, social and regulatory framework in which the Company operates or in
economic or technological trends or conditions, including inflation and consumer
confidence, on a global, regional or national basis. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date of this document. Hammerson does not undertake any obligation to
publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this document. Information contained
in this document relating to the Company should not be relied upon as a guide to
future performance.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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