15th Feb 2016 11:31
LONDON (Alliance News) - A strong performance in its shopping centres portfolio in the UK helped property developer Hammerson PLC to a higher pretax profit for 2015, the company said on Monday, and it said it remains confident it will continue to deliver strong returns, despite the global economic and political uncertainties ahead in 2016.
The FTSE 100 retail property group said its pretax profit for the year to the end of December was GBP731.6 million, up from GBP702.1 million a year earlier as its net gains from its property investments, including those with joint ventures and associates, increased.
The company said it would pay a final dividend of 12.8 pence per share, up 10% from 11.6p. Its total dividend for the year will be 22.3p, up 9.3% year-on-year.
Gross rental income for Hammerson increased to GBP236.0 million from GBP206.5 million, driven by strong demand for premium space in its UK shopping centre estate. It secured 400 lettings over the course of the year, driving 2.3% like-for-like growth in its net rental income stream over the year.
Hammerson said the strong performance for its premium shopping centre outlets has continued into 2016, and it remains confident this trend will persist.
"2015 was a strong year for the business, with our assets well placed to take advantage of improving consumer confidence and growing retailer demand for space in prime regional destinations, resulting in meaningful estimated rental value growth," said Hammerson Chief Executive David Atkins.
Hammerson greatly increased its exposure to regional shopping centres recently with the acquisition of the Grand Central shopping centre, which sits atop the redeveloped New Street rail station in Birmingham. It split the GBP350.0 million acquisition price 50:50 with partner the Canadian Pension Plan Investment Board.
Elsewhere in Hammerson's UK regional portfolio, the group said it saw strong pre-letting activity in its Victoria Gate development in Leeds and at the WestQuay Watermark project in Southampton, with both on track to open in 2016. Hammerson also added another 64,900 square metres of new space to its books in the year, including at the Elliott's Field shopping park in Rugby in Warwickshire.
Outside the UK, Hammerson acquired Festival Park in Majorca and an increased its stake in the Kildare Village site in Dublin.
Development work also is on track, the company said, with continued progress made at its projects in Croydon in south London and Brent Cross in north west London.
Hammerson completed GBP360.0 million in property sales over the course of the year and intends to sell another GBP300.0 million worth of property in 2016, part of its push to recycle capital and enhance returns to shareholders.
"We continue to recycle capital into assets best positioned to deliver value creation, with the acquisition in Ireland, Grand Central and Festival Park aligned with our strategy to own and manage prime retail destinations across Europe," Atkins added.
Outside the UK and Ireland, Hammerson said it was seeing encouraging results from its French portfolio, albeit within a market which remains weak. The group has repositioned its portfolio in France in recent years, and now its property portfolio both in the UK and France is entirely retail-focused.
"Looking ahead, whilst we recognise the global economic and political uncertainties, we remain confident that the business will continue to deliver sustainable, attractive returns," Atkins said.
Hammerson shares were up 3.8% to 555.50 pence on Monday morning, one of the best performers in the FTSE 100.
By Sam Unsted; [email protected]; @SamUAtAlliance
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