Lockdown hammers commercial landlord Hammerson

Three quarters of the tenants of shopping-centre operator Hammerson have been forced to close during the lockdown.

Thanks to the lockdown, only a quarter of shopping centre Hammerson’s tenants are allowed to remain open, says Joanna Bourke in the Evening Standard. Shops in its sites in France are subject to a 6pm curfew. It has therefore been forced to agree “rent holidays, deferrals and ... monthly payments for some firms across its estate”. Hammerson collected“just 41%” of the rent it was due to receive for the first quarter of 2021, though this is an improvement on what it received when the first lockdown was imposed.

Even before the crisis, Hammerson was under “sustained pressure”, with retailers struggling to contend with “online competition, high business rates and rising wage costs”, says Louisa Clarence-Smith in The Times. Since March retailers have paid only about 50% of the rent owed to landlords. With the shares down by 80% from the peak and finance chief James Lenton, who only joined the company in September 2019, set to quit, analysts are warning that the company is “still too highly geared”, with a 42% loan-to-value ratio even after a £552m survival rights issue in August.

The fate of rival property firm Intu is a cautionary tale for Hammerson’s investors, says George Hammond in the Financial Times. It was forced into administration last summer and then suffered the indignity of a “lack of willing buyers” for its portfolio of shopping centres. Even the Trafford Centre in Manchester, considered “the jewel in Intu’s crown”, is now owned by one of its lenders after a sales process “failed to attract any viable bids”.

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