Hammerson has announced that it is looking to redevelop its empty retail units, with a medium to long-term view of using them for alternative uses, such as residential, hotels or workspaces.\u00a0\r\n\r\nThe landlord said there are opportunities to \u201creinvigorate the assets and grow revenue by filling void units, generating additional income streams and changing the tenancy mix to improve footfall\u201d.\u00a0\r\n\r\nIt said that in the near-term, examples of more capital-light reinvigoration would include \u201cinnovative\u201d initiatives and partnerships for cultural, F&B and leisure experience offers, including food halls, event and destination spaces, health and wellbeing, boutique and roof top theatres, galleries and cinemas.\r\n\r\nAccording to Hammerson, the biggest opportunity for redevelopment would be in its department store space, where it currently has over 800,000ft2 of void space or short-term leases. This space has an average ERV of \u00a33 per ft2, meaning there \u201cremains considerable upside\u201d.\u00a0\r\n\r\nAs it \u201cconsiders our entire estates as space to be monetised\u201d, it said its car parks also represent a future opportunity as they are underutilised today, and with changes in car use and travel patterns, they could \u201cpresent additional income potential for the future\u201d.\r\n\r\nHammerson said: \u201cAs we invest in our destinations and brands and continue to consolidate into prime retail space, we will attract new and successfully established occupiers to drive footfall.\u201d\r\n\r\nIt comes as the profitability of its \u201cprime\u201d urban city assets have been affected by both Covid-19 and a lack of targeted investment over recent years to upgrade them.\r\n\r\nNews of the plans came alongside the group\u2019s latest half-year results, where it reported that net rental income was down by 8% year-on-year. Adjusted profit rose by 14% to \u00a320.1m however, reportedly benefitting from recovery in Value Retail and lower net finance costs.\r\n\r\nHammerson said that footfall in all territories has \u201cyet to recover\u201d, and is currently averaging at around 75% of 2019 levels. This follows an initial spike on reopening, with inner-city footfall still down on pre-pandemic levels ahead of a wider return to offices.\u00a0\r\n\r\nIt noted that categories that have performed strongly during the period included jewellery, footwear and homeware, while the pandemic also created a \u201cnoticeable lifestyle shift\u201d with a demand for outdoor entertainment and facilities, a trend it expects to continue in the long term.\r\n\r\nRita-Rose Gagn\u00e9, CEO of Hammerson, said: "We have continued to respond to the changing landscape during the first half of 2021, which again was impacted by Covid-19.\u00a0 As we emerge from a unique moment in time, I see a pathway to create sustainable value as we transform the business to become more agile and able to anticipate and respond to this change.\u00a0\u00a0\r\n\r\n\u201cWe own flagship destinations around which we can curate and reshape entire neighbourhoods and city centre spaces for generations to come. To realise this opportunity we are focused on continuing to de-lever the balance sheet through disposals of non-core assets, creating a leaner and more agile organisation, driving value in our destinations and accelerating our longer term developments."