17th Feb 2014 08:29
LONDON (Alliance News) - Retail property developer Hammerson PLC Monday reported an increase in profit and rental income for 2013 as demand for its properties stayed strong.
The company, which has assets in the UK and France and is now focused on retail property, posted pretax profit of GBP326.3 million for the year, up from GBP93.5 million in 2012, boosted by revaluation gains of GBP90.3 million. In the corresponding period, the company was hit by revaluation losses of GBP49.9 million.
Hammerson reported a drop in the gain on sale of investment properties in 2013 but this was attributed to the sale of most of its office portfolio in 2012. Gain on the sale of investment properties amounted to GBP11.7 million, compared with GBP42.6 million in 2012.
Hammerson, which owns the Bullring shopping centre in Birmingham among other properties, said gross rental income rose to GBP321.2 million for 2013, from GBP297.6 million a year earlier, while net rental income rose to GBP290.2 million, from GBP282.9 million.
Gross rental income represents the group's revenue from its tenants. Net rental income is the principal profit measure used to determine the performance of each sector.
The company's UK retail park business contributed significantly to the rise in rental income, which jumped to GBP86.6 million, from GBP70.9 million in 2012. Gross rental income for the French retail arm rose to GBP71.6 million, from GBP69.1 million.
The company's French portfolio includes Bercy 2 near Paris, which is home to retailer Next and Japanese food chain Yo! Sushi, and the new Les Terrasses du Port development in Marseilles, which is scheduled to open on May 3 and is now 93% let.
In the UK, the company has started extending its Silverburn shopping centre in Glasgow, while it has got planning permission for major retail developments in Croydon, south London and Brent Cross in north London.
Hammerson is planning a GBP1 billion redevelopment of Croydon's ageing Whitgift Centre in partnership with Australian shopping centre giant Westfield Group.
Overall, the property firm said its EPRA net asset value per share rose 5.7% to GBP5.73 from GBP5.42 in the corresponding period, while its loan to value ratio increased slightly to 38% from 36%.
EPRA is the European Public Real Estate Association, the industry body for European REITs.
Occupancy across the portfolio didn't budge at 97.7%.
Chief Executive David Atkins said the company is beginning to see an economic and consumer recovery in the UK, but he warned that the economic picture in France "is less clear cut".
"We are seeing improving demand from retailers, and Hammerson is creating the right product to meet their future requirements, which provides the conditions for selected growth in rental values," he said.
Atkins said the firm has clear visibility on a number of major development projects "which will create the destination venues of the future, and drive returns to our shareholders."
The board proposed a 8% increase in the final dividend to 10.8 pence, from 10.0 pence in 2012.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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