24th Jul 2014 07:59
LONDON (Alliance News) - Retail property developer Hammerson PLC Thursday reported an increase in profit for the first half, as it benefited from valuation gains on its portfolio.
The company, which has assets in the UK and France, posted pretax profit of GBP362.9 million for the six months-ended June 30, up from GBP80.8 million a year earlier. Hammerson was boosted by a GBP224.5 million revaluation gain on its property portfolio during the period after reporting a GBP20.0 million revaluation loss a year earlier.
Hammerson, which owns the Bullring shopping centre in Birmingham among other properties, said gross rental income rose to GBP92.9 million from GBP87.4 million a year earlier, while net rental income rose to GBP146.9 million from GBP140.4 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.
FTSE 100-listed Hammerson said it experienced strong demand for its retail property and during the period it added GBP12 million in new annualised rent compared with GBP10 million a year earlier. It said leases were signed 7% above estimated rental value, providing confidence in future income growth.
At an operating level, the company said it has continued to progress with its major London developments. The most high profile is the redevelopment of Croydon's ageing Whitgift shopping centre in partnership with Australian shopping centre giant Westfield Group.
Planning permission was granted in late 2013, and in April 2014, Croydon Council resolved to make a compulsory purchase order to bring together the land to deliver the GBP1 billion scheme which could commence construction in 2015.
In France, Hammerson opened its Marseille shopping and leisure centre in May. It said over 500,000 shoppers visited the centre during the first ten days of trading.
The centre is part of Marseille's Euroméditerranée programme, which is the largest urban regeneration project in Southern Europe representing EUR7 billion of investment.
Overall, the property firm said its EPRA net asset value per share rose 6.8% to GBP6.12 from GBP5.73 in the corresponding period, while its loan-to-value ratio remained unchanged 38%.
EPRA is the European Public Real Estate Association, the industry body for European REITs.
Looking ahead, the company said it is confident in its ability to deliver strong returns for shareholders following an "encouraging" first half.
"The consumer backdrop is improving in the UK and stabilising in France, against which we are providing the space for successful, expanding retailers, allowing us to grow rental values in selected locations," Chief Executive David Atkins said in a statement.
"At the same time, global investors are increasingly seeking exposure to the benefits of high-quality retail assets, which has had a beneficial impact on capital values," he added.
On the back of its performance the company increased its interim dividend 6.0% to 8.8 pence compared with 8.3 pence.
Hammerson shared were quoted down 1.2% at 607.50 pence Thursday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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