Shopping centre operator Hammerson hit with £1.73bn loss as Covid restrictions hit retail sector

Shopping centre operator Hammerson saw losses more than double in 2020 after it was hit hard by the coronavirus pandemic.

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The owner of Telford Forge Shopping Park and the Bullring and Grand Central in Birmingham posted a pre-tax loss of £1.73 billion compared with a £779.3 million loss the year before.

It was hit by a property revaluation deficit, closures, tenant restructuring, higher provisions for bad debt and tenant incentives.

Revenue fell to £182.9 million from £246.2 million, while net rental income fell 41 per cent on a like-for-like basis to £157.6 million, its largest fall in its history.

The company’s UK flagship malls were hardest hit, with values falling almost 36 per cent, more than double the decline for its French and Irish centers. Value Retail, the company’s designer outlets business, was more resilient with a 6.2 per cent drop.

The entrance to Telford Forge Retail Park. Photo: Google

Hammerson said its immediate focus in 2021 is on navigating the coronavirus pandemic, and it will make further disposals to strengthen the balance sheet, manage refinancing, and sharpen its operations.

The company said it achieved net proceeds of £328 million from disposals in 2020, and added it was working on a thorough strategic and organisational review.

Retailers were already struggling before the coronavirus hit, due to a combination of online shopping, high property taxes and rising costs. The closures brought about by the pandemic turned that struggle into a crisis, forcing dozens of the countries biggest retailers into bankruptcy.

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Rita-Rose Gagné, Hammerson CEO, said: "As our results show, Hammerson was hit hard.

“The retail sector, already in the grip of major structural change, has been significantly impacted by the restrictions imposed to tackle the pandemic, and we've also seen an increasing number of retail failures. Combined, this has resulted in the largest fall in net rental income and UK asset values in the group's history.

"Our immediate focus in 2021 is leading Hammerson through Covid-19 to safety. This means further disposals to strengthen the balance sheet, managing refinancing, and sharpening our operations to maximise income. We will then focus on realising the quality of our destinations to drive the business forward. We are currently working on a thorough strategic and organisational review that will map out a route to future growth to transform the business in the context of what will remain a tough economic and structural backdrop."

Hammerson additionally announced the appointment of Habib Annous as a non-executive director, effective May 5.

This comes after non-executive director Pierre Bouchut said he will not be standing for re-election.

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