Shopping centre owner Hammerson has reported a loss of £268.1m in its 2018 FY results, also announcing it aims to make £500m in disposals this year.
For the period ending 31 December the group saw its revenues drop 9% to £292m, Hammerson said the loss follows “a tough year particularly in the UK”. It added its net rental income was affected by CVA’s at its flagship UK destinations dropping 1.3% and 4.3% at retail parks.
Last year the company announced a strategy involving selling more than £1bn of its property portfolio and this year it said it aims to sell off a further £500m in assets as an attempt to cut its debts.
The company, which owns Birmingham’s Bullring and Brent Cross in north London, said it has entered into a “relationship agreement” with one of its shareholders, Elliott Advisors. Elliott said it supports the company’s accelerated disposal programme and the decision to expand the board and establish a board investment and disposals committee.
David Atkins, chief executive of Hammerson, said: “2018 was a tough year particularly in the UK. Tenant failures, the structural shift in retail and a more considered consumer created a difficult operating environment, putting pressure on property values. Outside of the UK our destinations performed better with a strong contribution from premium outlets.
“We believe that a successful deleveraging programme will best position Hammerson for the current environment and beyond. Disposals will also enable us to prove the inherent value of this business – which we believe is not recognised in the current equity market.”
He added: “Having successfully achieved £570m of disposals in 2018, we are aiming to dispose of at least £500m in 2019. We remain committed to exiting retail parks over the medium term and are in active portfolio-wide discussions on transactions of over £900m, which would add further strength to our balance sheet.
“Over the longer term we will generate opportunities to create additional value through City Quarters, which will see us transform many of our city venues beyond pure retail into successful, thriving neighbourhoods. The job of creating flagship spaces is never done, but through expert management, innovation and investment we are confident in the future of Hammerson and in maximising value creation for shareholders.”