Hammerson announces proposed rights issue combined with sale of VIA Outlets delivering £825m gross proceeds to recapitalise and further reposition the business.

Prior to Covid-19, Hammerson was delivering against its strategy of reducing debt, progressing disposals, and making significant steps to shift the brand mix to better reflect customer demand. Covid-19 has had an adverse impact on the Group’s operational and financial performance. The Board has taken the decision to undertake these significant transactions, enhancing Hammerson’s strategic and financial flexibility, supporting the delivery of a more focused portfolio of flagship destinations and over the medium term its City Quarters development opportunities.

Half-year results

EPS & dividend: Adjusted EPS of 2.3p (-84% vs HY 2019). Expect to resume dividends in H2 2020 on completion of the transactions, initially in the form of scrip to maintain REIT compliance

NRI: Group performance of £87.3m (-27% on a like-for-like basis excluding premium outlets) impacted by Covid-19 forced closure of destinations, provisioning for reduced collections partly due to amended rental agreements and deferments, government intervention on rental payment and continued administrations. UK flagships -30.5%; France -30.0%; Ireland -16.9% and premium outlets -50.8%

Net assets & portfolio valuations: Equity shareholders’ funds of £3.4bn (-23%), equivalent to EPRA Net Tangible Assets (NTA) per share of £4.58 (-21%). Group capital return of -11.7%; Flagships: UK -21.1%; France -9.4%; Ireland -9.9%; retail parks -13.3% and premium outlets -5.0%

Net debt: As at 30 June, net debt £3bn; liquidity of £1.2bn; gearing 98%; unencumbered asset ratio of 1.54x and fully proportionally consolidated LTV 51%


Key transaction details

Rights issue and disposal update

  • Proposed rights issue (the “Rights Issue”)to raise £551.7m with the two largest shareholders - APG c.20% and Lighthouse Capital c.15% - of current shareholding committing to vote in favour of the Rights Issue and take up their rights
  • Disposal of substantially all of the 50% interest in VIA Outlets (the “Disposal”) to existing JV partner APG has exchanged for estimated gross cash proceeds of c.€301m (c.£274m)
  • Both transactions are subject to shareholder approval. The Disposal to APG is conditional on the Rights Issue proceeding, and is expected to complete in Q4 2020

Strengthened balance sheet and improved liquidity

  • 30 June 2020 on a pro forma basis (adjusted for the Rights Issue and Disposal) net debt reduced by a quarter to £2.2bn
  • All credit metrics comfortably within covenants on a pro forma basis: gearing 57%; unencumbered asset ratio of 2.19x
  • Pro forma fully proportionally consolidated LTV 42% 
  • Focus remains on further disposals to reduce debt over the medium term

Further details of the Rights Issue and the Disposal are set out in a separate announcement at www.hammersontransaction.com.


New UK leasing approach

  • Introduction of a new leasing approach, based on experiences with brands; current leases in Europe; and the more collaborative approach of premium outlets. This new approach will include: more flexible leases; rebased rents at more affordable levels; indexation replacing the existing rent-review system; and an omnichannel top-up element


David Atkins, Chief Executive of Hammerson, said:

“Today we have announced a series of transactions to recapitalise the business and reduce leverage by a quarter. This will help us to deal with these unprecedented conditions while enabling us to reposition Hammerson further. Looking forward, we will continue to dispose of assets and recycle capital from across the portfolio as we create a business focused on flagship destinations and mixed-use City Quarters over the medium term.   

“The extraordinary disruption caused by Covid-19 on the retail property sector, the economy and society as a whole is reflected in these half year results, however, in recent weeks we have seen an encouraging increase in footfall as confidence begins to return amongst visitors to our flagship destinations.

“The pandemic has exacerbated structural shifts in retail, exerting further pressure on both property owners and brands, and provided further evidence that the UK’s historic leasing model has served its time. It is outdated, inflexible and needs to change.  We are introducing a new UK leasing approach - one that is simpler, reflects an omnichannel retail environment and rewards positive performance on both sides. It will deliver a sustainable, growing income stream and we are in initial discussions with retailers and anticipate introducing the first of the new leases later this year.”


Stephen Delport, CEO of Lighthouse, said:

“Retail has been hit hard by the structural changes taking place in the sector which have been made worse by the impact of Covid-19. However, we have a firm belief, shared by many retailers, that best in class destinations will remain a key part of how and where consumers continue to spend their money.  This is why we are supporting the transactions announced today.”


Actions taken during Covid-19

Covenant headroom: Amendment negotiated to the covenants on existing private placement notes until 31 December 2021

Revolving Credit Facility: £400m drawn under the £1.2bn Revolving Credit Facility to provide surplus cash reserves, as at 30 June total liquidity stands at £1.2bn

CCFF: Approval from HM Treasury and the Bank of England’s Covid Corporate Financing Facility for up to £300m; £75m has been issued in July and is being held in cash

Service charge savings: To support brands, savings generated in Q2 of 40% in the UK and Ireland and savings of 27% in H1 in France

Admin cost savings: Group admin costs reduced by 6.3% during H1 across property, administration and service charge savings

Disposals: In April, Orion European Real Estate Fund V announced that it did not intend to complete on the sale of a portfolio of seven retail parks, despite exchanging unconditional contracts on 20 February 2020. The £21 million deposit from the transaction was retained. Today the disposal of substantially all of 50% interest in VIA Outlets to existing JV partner APG has exchanged for estimated net cash proceeds of c.£269m and completion is expected in Q4 2020

Suspension of dividends:  In March, during lockdown, the Board decided it was not appropriate to recommend the final dividend of 14.8 pence per share for the financial year ended 31 December 2019

Remuneration: The Board, including Executive Directors agreed to a 20% reduction in pay from April 2020-June 2020


Half year operational overview

Occupancy: Continued high level of Group occupancy at 94% (FY 2019: 97%); UK flagships 93%; French flagships 94%; Ireland flagships 96%; Premium outlets 93%

Rent collection:  As at 31 July 2020, 72% of H1 2020 rent had been collected for the Group, with 34% of Q3 rent due collected. Average rental waiver of 1.1 months and deferral of 0.8 months during Covid-19 closures

Tenant restructuring: During the six months to the 30 June 2020, 36 of the Group’s tenants have entered administration or undertaken a CVA affecting 88 units (out of 2,886 units across the Group) of which 49 continue to trade

Leasing: £6.5m of new income secured across the Group (-29% vs HY 2019). Key lease agreements during the period include Brown Thomas at Dundrum to replace House of Fraser, Haidilao at Bullring, taking its first restaurant outside of London and Slim Chickens at Westquay

Footfall: All three territories outperformed national footfall benchmarks in 2019 with continued outperformance in 2020, in the lead up to national lockdowns. Following reopening there has been a strong recovery in France and Ireland flagships and retail parks with footfall  -18% vs July 2019 and all are currently in line with or outperforming national benchmarks. With UK flagships more weighted towards city centre venues, which are public transport and workforce orientated, initial reopening footfall was subdued (-73% for w/c 14 June). Strong sustained recovery is underway: +22% point improvement for July to -51%

City Quarters: Continued progress with Section 106 planning agreement signed for Martineau Galleries, Birmingham; architects appointed for Dublin Central scheme and planning committee date set for The Goodsyard, London in Q4 2020

Net Positive:  Continued commitment to Net Positive strategy. Installation of photovoltaic arrays at Cabot Circus, Bristol and Les Terrasses du Port, Marseille providing clean electricity on-site. Covid-19 closure of destinations significantly reduced utility demand, contributing to a first half reduction in energy demand of 21% and carbon emissions of 27%   


Board changes, as previously announced

Chair of the Board: Robert Noel to succeed David Tyler as Non-Executive Chair. He will join the Board and take over the position with effect from a date to be confirmed but no later than 1 October 2020

Non-Executive Director appointment: Desmond (Des) de Beer joined the Board in June as a non-executive director. He is a non-executive director of Lighthouse Capital, a shareholder in the Company

CEO succession planning: After nearly 11 years in the role, David Atkins will step down as chief executive. He will remain in position until spring 2021 at the latest and the Board is currently conducting a search for his successor


Half-year 2020 results at a glance


Results presentation today:

The results presentation will be broadcast via webcast at 9.30am BST today, Thursday 6 August 2020. The link to the webcast is as follows: https://webcasting.brrmedia.co.uk/broadcast/5f2a805965023062edd7e915

At the end of the presentation you will be able to participate in a question and answer session by submitting your questions on the webcast. Just prior to the event starting the accompanying slides will be made available at www.hammersontransaction.com.  A playback of the webcast will also be available at www.hammersontransaction.com.


The results presentation is not intended for persons located in the United States and no participants in press meetings conducted by telephone, video conferencing or webcast, or recipients of written press-related materials released in conjunction with such press meetings, may be physically located in the United States. The securities offered will not be or have not been registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement of the Securities Act



Who we are

At Hammerson, we create vibrant, continually evolving spaces, in and around major cities, where people and brands want to be.

We seek to deliver value for all our stakeholders and to create a positive and sustainable impact for generations to come. We own and operate high-quality flagship destinations and have investments in premium outlets in selected European countries and have a City Quarters strategy to evolve our portfolio beyond retail.


Our strategy

There are three elements to our strategy, which together seek to drive returns for shareholders and deliver for customers, brands and colleagues.

  • Capital efficiency: Reducing debt; disciplined capital expenditure and cost control
  • Optimised portfolio: Pursuing further portfolio-wide disposals and recycling capital
  • Operational excellence: Managing the structural shift in retail, maintaining flagship vibrancy and diversifying towards City Quarters

The disposal programme remains a key element of the strategy and we will continue to pursue additional disposal opportunities including individual assets and portfolio options from across our geographies and sectors. The three elements of the strategy are all strengthened by the new leasing approach in the UK


Differentiated by the Hammerson Blueprint

We are uniquely differentiated by the Hammerson Blueprint, the principles of which are embedded across everything we do. The Blueprint provides a consistent frame of reference for all areas of the business to ensure an excellent experience for stakeholders.

The three objectives that drive the Blueprint are:

  • Positive place makers – Delivering positive impacts economically, socially and environmentally
  • Destination makers – Creating experience-led places to enjoy, shop, live and work
  • Relationship makers – Collaborating with brands, partners and third party experts to deliver value

In 2017, we launched our sector-leading, comprehensive target to be Net Positive for carbon, water, resource-use and socio-economic impacts by 2030. We were the first real estate company globally to launch such ambitious targets and we reach the end of phase one at the close of 2020. Whilst the business has been tested by the Covid-19 crisis during the first half of 2020, this has not reduced our focus on sustainability. Further details are found in the Sustainability review on page 22.


Proposed rights issue, sale of VIA Outlets and new approach to UK leasing 


  • The Company has today announced proposals for a rights issue to raise gross proceeds of £551.7m and the disposal of substantially all of its 50% interest in VIA Outlets for c.€301m (c.£274m)
  • The transactions will significantly strengthen the Company’s financial position, and provide liquidity headroom and flexibility to advance its longer term strategy
  • The transactions are subject to joint shareholder vote and if successful, are expected to provide financial flexibility to introduce a new leasing approach in the UK, supporting more sustainable shareholder returns in the future
  • The Group is pro-actively taking measures to manage the material impact of continued structural change in retail that has been exacerbated by Covid-19


Disposal of VIA Outlets

  • In addition to the rights issue, also announced today, the disposal of substantially all of the Company’s 50% interest in VIA Outlets - a portfolio of 11 premium outlets across Europe to APG
  • Subject to retention of a 7.26% stake in VIA Outlets Zweibrücken B.V. (representing c.4% of Hammerson’s existing interest in VIA Outlets)
  • Estimated gross cash proceeds of approximately c.€301m c.(£274m)
  • Disposal represents a net initial yield of 6.5% and an 18.7% discount to gross asset value as at 30 June 2020.
  • Lighthouse Capital has undertaken to vote in favour of the Disposal, which APG is not entitled to do as it is a related party for these purposes
  • The Directors are confident that APG will receive the necessary regulatory approvals for the Disposal and expect completion in Q4 2020


New approach to UK leasing

It has become very clear that the UK leasing model is no longer fit for purpose. Current approaches are based around the Landlord and Tenant Act of 1954, and property landscape long before the internet even existed. Covid has particularly exposed the weakness of the UK system. The current model benefits neither property owners nor retailers, as rent levels are set according to historic market evidence rather than long-term affordability, and do not in any way take into account the role stores play in an omnichannel world. It also incentivises landlords to chase the highest rent payer for every unit, rather than considering the optimal brand mix and longer term performance for destinations.

We are introducing a new leasing approach in the UK, based on our experiences with brands: current leases in continental Europe; and the more collaborative approach of premium outlets. This new approach will include: more flexible leases; rebased rents at more affordable levels; indexation replacing the existing rent-review system, which is already a feature in French leases; and a top-up element based on appropriate omnichannel metrics. Leases already include some on these features, and they do work, including the recently signed Brown Thomas store at Dundrum, Dublin. To progress this approach further, we have already started a trial at Union Square in Aberdeen and this new approach will provide a sustainable, growing income stream, which in turn will stabilise capital values.



As a responsible business, we have put in place a series of measures aimed at minimising the impact of the current Coronavirus outbreak on our colleagues, destinations, customers and communities.


Our Colleagues

In March, we established a dedicated working group to coordinate our response to Covid-19. This body reports regularly to the Executive Committee on our response and on how we are caring for our colleagues. We also created a dedicated taskforce to coordinate the re-opening of our destinations across the UK, Ireland and France.

At our flagship destinations, we are currently operating on a split team basis to manage risk. This means that colleagues are divided into two teams, with only one team in a centre at any one time. The majority of our colleagues worked from home from March to June. In terms of our offices, in the UK and Ireland we continue to support colleagues working from home if they wish, but we recognise that this can be challenging for some. From early August we safely reopened our offices in London and Dublin for those who wish to return. Our colleagues in France are back in the office in line with national guidance.  Returning colleagues have been provided with a ‘welcome back’ pack which outlines our new ways of working, in line with government guidance.

We continue to assist colleagues who wish to volunteer on national and local projects. We appreciate that this period has been a different way of working for teams and we are hugely grateful for the contribution our colleagues have already made to the business and our communities, in what have been extraordinary circumstances.

In this period of unprecedented disruption, the Board, including the Executive Directors decided to take a 20% reduction in pay from    1 April 2020 to 30 June 2020.


Our Destinations

Since the onset of Covid-19, our teams have successfully managed the closure and reopening of over 1.6 million m² of retail space in the UK, France and Ireland and during the height of lockdown, supported 372,000m² of essential retail for the benefit of our customers and communities. All of our destinations have now reopened. Across the UK flagship and retail parks portfolio, non-essential retail has been open in line with government guidelines since 15 June, with the exception of the Scottish assets which reopened on 13 July, and Highcross, which closed in line with the local lockdown from 30 June to 27 July. F&B brands began to trade for eat-in from 4 July in England and mid-July in Scotland. 88% of stores eligible to trade have reopened. Irish centres have also been fully open since 15 June, with F&B from 29 June and 89% of flagship occupiers in Ireland are now open. In France, half our flagship destinations reopened from 11-13 May, and all have been trading since 2 June and all occupiers are now open with the exception of the theatre and concert hall at Italie Deux, Paris. 

Across premium outlets, Value Retail Villages were closed from 11 March at the earliest (Fidenza Village) to 15 June 2020 at the latest (Bicester Village and Kildare Village). VIA Centres were closed from 14 March at the earliest (Fashion Arena Prague Outlet and Wroclaw Fashion Outlet, Poland) to 15 June 2020 at the latest (Freeport Lisboa Fashion Outlet).

All destinations across the VIA and Value Retail premium outlets portfolios have also reopened, in line with the latest guidance from the respective national governments.

The health and wellbeing of colleagues, customers, and partners is our priority, and we have introduced a range of additional safety measures across the portfolio. While the specifics will vary depending on the guidelines in each market, these measures include:

  • Clear signage throughout our destinations reminding consumers of the need to follow social distancing guidance
  • Introduction of one-way systems where required
  • Installation of hand sanitiser stations
  • Enhanced cleaning procedures, and updated processes to ensure cleaning teams are clearly visible, to provide reassurance
  • Live footfall monitoring to ensure destinations do not exceed revised capacity limits
  • The introduction of queuing systems at entrances where required
  • Working with retail technology partner Red Ant to launch a new feature on our destinations’ websites to help customers plan their visits. ‘Crowd Checker’ provides shoppers with live updates on how popular a centre is in real time, so that they know the best time to visit. This feature is an industry first and is live across all our flagship destinations.

Emerging from lockdown, we recognised consumers’ need for something different and their desire for new ways to be entertained, in a safe environment. We have delivered a range of initiatives, in and around our destinations, to create joyful moments and memorable experiences for our customers and communities:

  • Drive-through cinema experiences at Brent Cross and Victoria Leeds including a UK-first premiere screening at Brent Cross
  • Welcoming local musicians to Brent Cross, Cabot Circus, Highcross, The Oracle, Victoria Leeds, Westquay, Whitgift and Centrale
  • Partnering with community artists in Westquay and Highcross on some bespoke artwork to brighten up our venues



Our Customers

Covid-19 has had an unprecedented impact on many businesses. Following the closure of our flagships (except for essential retail) we have supported our occupiers, particularly smaller and independent brands. All discussions with brands regarding rent deferrals, monthly payments, and waivers have been on a case-by-case basis, taking into account the business model, risk profile and ability of the occupier to pay, alongside the support made available by the relevant governments.

As at 31 July 2020, 72% of H1 2020 rent had been collected for the Group, whilst 34% of Q3 rent due had been collected. Average rental waiver of 1.1 months and deferral of 0.8 months during Covid-19 closures 

We have reached agreement on 776 leases across the Group, where an average rent waiver of just over a month has been given, with deferrals averaging just under a month. We continue to focus our efforts to reach agreements on the remaining leases as soon as possible.


Our Communities

We understand the significant impact that Covid-19 is having on the communities which we are part of.  In addition to our experience-led activities, we have also been continuing our efforts to help those needing extra support.

We have provided free parking for NHS staff at our UK centres over with over 2,000 people benefiting from this initiative, which ran until the end of July. 

We have worked with brands to donate merchandise to local organisations across the portfolio, supporting homelessness charities and Women’s Aid shelters. In our French centres, we continue to provide a range of support services to those affected by domestic violence and at Dundrum Town Centre, Ireland, Women’s Aid has access to a safe space within the centre, to facilitate drop in counselling sessions, and best support those in need of help.

Our community team has also worked closely with our network of local partners to identify how we can most effectively support them, refocusing existing community programmes to respond to the crisis. We have allocated spend towards charity initiatives and will be working with local Community Foundations to select around 90 charity partners across the UK for community grants.


Directors’ indemnity insurance

The Company’s Annual Directors’ and Officers’ Liability Insurance cover is renewed annually on 31 July. The capacity available in the market has shrunk materially over the last year, and many companies have faced challenges in renewing their D&O on the same terms even at substantially increased premiums. Hammerson has secured a one month extension of this insurance to 31 August, and intends to resume conversations with insurers on its annual cover following this announcement when there is greater public disclosure about the shape of the Group’s future financial position.

As a precaution, on 5 August 2020, the Company undertook that it would set up a trust (the “Trust”) for the benefit of the existing Directors and the incoming Chair (the “Indemnified Persons”), with Crestbridge Corporate Nominees Limited as the trustee, into which it will pay £21.4 million on or before 28 August 2020, unless prior to that date the Company is able to procure director and officer liability insurance that the existing Directors and the incoming Chair consider satisfactory such that the Trust is not required. The funds in the Trust will be available to satisfy the Company’s obligations under existing indemnities granted by the Company in favour of the Indemnified Persons under the Company’s Articles of Association if such obligations are not satisfied by the Company or covered by director and officer liability insurance. This Trust is a smaller related party transaction under the Listing Rule 11.1.10.

Any remaining funds in the Trust will be repaid to the Company at the latest either after 75 months, or if at such point there is an outstanding claim against an Indemnified Person, once such claim is resolved. The Trust can be terminated earlier, and the funds returned to the Company, in the event that the Company is able to procure insurance that the existing Directors and the incoming Chair consider satisfactory such that the Trust is no longer required.




This Operating review provides an overview of the performance of our portfolio sectors in the first half of 2020. Consistent with internal reporting as described on page 26 of the Financial review, the operational metrics in this section are presented on a proportionally consolidated basis reflecting the Group’s ownership share. Further portfolio analysis is provided in the Additional disclosures section on pages 81 to 92.





We invest in and manage six high-quality flagship destinations in France which accommodate more than 750 tenants and attracted almost 70 million visitors in 2019. The portfolio represented 18% of the Group's portfolio value at 30 June 2020.

The assets are in urban locations in Paris, Marseille and Nice, and at 30 June 2020, the two wholly-owned centres, Les Terrasses du Port, Marseille and Les 3 Fontaines, Cergy, accounted for 78% of the value of the French portfolio.

Our French team works closely with our UK and Irish teams to ensure operational excellence is maintained across our destinations. A number of functions, including marketing, IT and product innovation have Group-wide remits.

In May 2020, we sold SQY Ouest (see page 30) and remain on-site with our extension schemes at Italie Deux and Les 3 Fontaines. Further details of these two projects are provided on page 19.


Operational summary

Net rental income

Net rental income for our French portfolio for the first six months of 2020 was £20.5 million, £15.8 million lower than in 2019.

The disposals of 75% of Italie Deux in December 2019 and SQY Ouest in May 2020 reduced year-on-year NRI by £8.2 million, whilst the provision for outstanding trade receivables at 30 June 2020 reduced NRI by £8.0 million.  This latter charge was the principal cause of like-for-like NRI being 30.0% lower than the prior year. Net leasing, with expiries exceeding new leasing, resulted in increased vacancy and adversely affected like-for-like NRI in 2020 by £1.1 million.


Collections and arrears

The vast majority of stores were closed from 17 March under direction of the government in response to the Covid-19 pandemic. Three centres: Espace Saint-Quentin, Nicetoile and Les Terrasses du Port reopened in mid-May with the remaining centres opening at the start of June. All brands and F&B operators within the flagships are now trading with the exception of the theatre and concert hall at Italie Deux.  As with the UK and Ireland, rent collection levels have fallen significantly, with 12% of Q2 rent collected by 30 June compared with 94% of Q1 rent.

These low collection rates increased trade arrears, such that at 30 June 2020 gross trade arrears totalled £63.3 million, an increase of £27.3 million in 2020.  After taking account of tenant deposits, guarantees and sales tax we have recognised a provision of       £18.6 million against the arrears balance, an increase of £8.2 million during the first half of the year.

During July we have continued to collect outstanding arrears and the latest collection statistics for our French centres are summarised in the table below:

Consistent with our approach in the UK and Ireland, we have targeted financial support for our tenants through a risk-based approach.  At 31 July 2020, agreement had been reached on 78 leases, equivalent to £5.1 million, or 8% of passing rent, resulting in an average rent waiver of 1.5 months and rent deferral period of 1.7 months and discussions are ongoing on the remainder of leases.


Occupancy, leasing and tenant restructuring

Occupancy at 30 June 2020 was 94.2%, 280bp lower than at the beginning of the year.  This reduction is equivalent to additional vacant ERV of £1.8 million or 22 stores and has been driven by lease expiries and administrations in the period.

Leasing volumes started the year strongly with rent secured by the end of March of £1.1 million, compared to £0.4 million at the end of March 2019. However, only £0.3 million of rent was secured during Q2 resulting in leasing for the first half of 2020 being 50% lower than 2019.

For principal leases, which accounted for 91% of total leasing, the average rent secured was 4% above both December 2019 ERVs and the previous passing rent. The average lease term was ten years with an average incentive packages of one month and included leases with brands such as Mango, Petit Bateau, Snipes and The Kooples.


As demonstrated by the above leasing statistics, whilst in general the retail leasing market has been stronger than in the UK, Covid-19 has caused significant stress and forced a number of tenants to fail. During the first half of the year, 14 brands have undertaken restructuring affecting 35 units and £2.5 million of passing rent. At 30 June 2020, 49 units are under a CVA or administration, of which all continue to trade with current passing rent of £3.5 million equivalent to 1.2% of Group passing rent.  


Footfall and sales

Footfall for the first half of 2020 was down 40%, predominantly due to the closure of most stores during the lockdown period. June trading performance saw footfall 28% below 2019 with a significant improvement in July with footfall being 17% below 2019. 

We receive monthly sales information in France, and for June, retail sales, calculated on a same centre, like-for-like basis fell by 17%.