Hammerson Thrives: Strong Summer Footfall Fuels Leasing Success and Bond Bonanza
Property giant Hammerson recently provided an encouraging operational update, highlighting sustained strong footfall and positive momentum across its portfolio throughout the crucial summer period from June to August. This robust performance was evident across all its geographical markets, underscoring the success of its strategic initiatives.
In the UK, Hammerson properties experienced a notable 6% year-on-year increase in footfall, translating to an additional 1.3 million customer visits over the summer months. Similarly, its two key French destinations, Les 3 Fontaines and Les Terrasses du Port, saw a 5% rise, while Ireland's Dundrum recorded a 3% increase. All these figures surpassed respective national benchmarks. Particularly strong UK performers included the Bullring, which soared by 12%, The Oracle with a 9% uplift, and Cabot Circus, up 5%, all benefiting significantly from ongoing repositioning efforts and new tenant openings.
This impressive footfall growth directly fueled strong year-on-year sales for Hammerson's brand partners. Over the summer, like-for-like sales growth in the UK registered an impressive 4%, contributing to a group-wide increase of 2.4%. Consequently, demand for prime retail and leisure space within its destinations remains exceptionally strong, demonstrated by the exchange of 71 long-term leasing deals during the same period.
These long-term lease agreements were secured at significant uplifts, averaging 29% ahead of previous passing rent and 15% ahead of estimated rental value (ERV) on a net effective basis. The UK market showcased its strongest performance, achieving rates 22% over ERV, highlighting the intrinsic value and desirability of Hammerson's assets.
Reflecting this robust operational performance, Hammerson also received strong support from the credit markets. The company announced the successful pricing of a €350 million bond with a 6.5-year maturity, priced at 110 basis points over euro mid-swaps, carrying an annual coupon of 3.5%. This issuance was highly oversubscribed, peaking at more than five times coverage. These New Bonds represent the initial phase of early refinancing for the group's existing €700 million 1.75% Sustainability-Linked bonds, which are set to mature in June 2027.
The successful bond issuance follows recent positive revisions from credit rating agencies. Fitch upgraded Hammerson's senior unsecured debt rating to A- and its Long-Term Issuer Rating to BBB+ last week, while Moody's revised its Baa2 rating outlook to Positive. As a direct result of the early issuance of its €350 million New Bonds, the company now projects its FY25 earnings to be approximately £101 million.
Rita-Rose Gagné, CEO of Hammerson, commented on these achievements, stating, “We are delighted with the high levels of demand for our bond issue, a testament to the strength and success of our strategic delivery. We continue to invest in destination repositioning and leasing to drive returns while our JV buyouts have enabled us to take full control of our assets and grow income. Demand for our prime space is robust, as evidenced by the operational performance we drove over the summer. Momentum is continuing into September and October and we have a strong pipeline ahead.”
