Hammerson’s like-for-like rental income grows up by 4.4%

Posted under General by Michael

Despite of consumer downturn and economic slump, Hammerson could manage an increase of 5.4% in its like-for-like rental income in the City of London. It was expecting significant increase in its income on account of completion of large number of developments, but the rapid increase in incentives to office and retail tenants affected its income. As per company’s interim results, its retail schemes in Bristol and Leicester were 87% let but rent free periods had moved out to 24 months from 12 during the current year.

Its 125 Old Broad Street City office scheme was 35% let but rent free periods had increased to 30 months on lease of 15 years. Tenant quality on retail side was better than Liberty International, which had 3% rent roll in administration compared to Hammerson’s 0.3%.

But good rental performance failed to reflect in Hammerson’s portfolio, which declined to £7.1bn form £7.3bn at the end of December, amounting to a fall of 10% in the net asset value. Hammerson registered worst performance in its retail warehousing sector. The fall in value was 13%, around 3.7% below the Investment Property Databank average.

Chairman John Nelson, while explaining reasons for the below-par performance, noted that conditions in international debt markets led to slump in the real estate values and it was unclear when the situation would improve. But he expressed confidence in experience of management and Hammerson’s business strengths in exploiting difficult market conditions to its advantage.

More