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COVID-19 update


Hammerson today provides an update on the impact of the global COVID-19 pandemic on the business.

In this period of unprecedented disruption, our priority is and will always remain the health and wellbeing of our colleagues, consumers and partners, whilst protecting the long-term value of the Company.

In each of our markets, we therefore continue to follow government advice and best practice closely, and we are taking appropriate steps to mitigate the spread of the virus.  In particular, we are committed to supporting our colleagues and their families through this difficult time, and are hugely grateful for the contribution they have already made to the business in extraordinary circumstances.

In these circumstances, we believe we should support our occupiers, particularly smaller and independent brands that are less resilient to the closure of their space in our centres.  We have received a variety of requests for rent deferrals, monthly payments, and waivers, which we are reviewing on a case-by-case basis, taking into account the business model and risk profile of the occupier, alongside the aid made available by the relevant governments.


Across the UK retail portfolio, properties and stores have been shut in line with UK government advice since 24 March other than for access to essential retail as defined by the UK government.  Overall, as at the end of 27 March (Q+2 day), we have received 37% of UK rent billed for Q21.  Adjusted for rent deferred, switched to monthly payment, and a nominal proportion waived, we have received 57% of rent due.  We anticipate both figures to increase as temporary agreements are implemented and further cash is collected.

  • Flagship destinations

One flagship destination is fully closed – Victoria, Leeds. The essential stores currently trading constitute around 30 units across the UK portfolio, accounting for c.4% of UK flagship passing rent.

Overall, as at the end of last week, we have received 35% of UK flagship rent billed for Q2.  On an adjusted basis, we have received 55% of rent currently expected.  Q+7 day collections rates for UK flagships destinations averaged 96% during 2019.

  • Retail parks and UK Other

In line with the approach taken for our UK flagship destinations, all non-essential stores are shut on UK retail parks.  To date, 36% of Q2 rent billed has been collected from retail parks, or 62% on an adjusted basis.  On our UK Other portfolio, collection rates are higher and we have collected 49% of Q2 rent billed, or 61% on an adjusted basis.

France flagship destinations

In France, our flagship destinations have been closed since 15 March, other than for access to essential retail as defined by the French government, which comprises around 15 units across the portfolio, accounting for c.3% of France passing rent.

At the request of the French government and in line with our European peers, we have offered temporary monthly rent arrangements with all brands in the Hammerson France flagship portfolio, ahead of the quarter day on 1 April.  Payment for the month of April will be deferred, with further guidance from the government on a payment timeline expected before 15 April.  Currently, May and June will be due in advance at the beginning of the month.

Ireland flagship destinations

At the direction of the Irish government, our flagship destinations have been closed since 25 March, other than for access to essential retail, which constitutes around 25 units accounting for c.8% of Ireland passing rent.

We are engaged in similar discussions with our brands to those in the UK ahead of the quarter day on 1 April.  At this stage, it is too early to quantify the potential impact, although we have already received 16% of Q2 rent due.

Premium Outlets

At the time of writing, 17 of the 20 premium outlets held by Hammerson’s interests in Value Retail and VIA Outlets are closed, following government directives in the relevant regions.  It is not possible at this stage to quantify the impact of the ongoing disruption caused by COVID-19 on these externally managed and independently financed vehicles.  Whilst c.36% of Hammerson’s share of GRI is derived from variable rent, it is worth highlighting that these entities, particularly Value Retail, also entail a higher degree of variable cost, most notably marketing spend, which will be curtailed in the near-term.

Liquidity and balance sheet

At 31 December 2019, the Company had £1.2bn of undrawn committed facilities and cash. On 25 March we drew an additional £100m under these facilities to provide surplus cash reserves.  Liquidity will be further increased by the net proceeds of £395m in relation to the completion of the unconditional sale of a portfolio of seven retail parks, announced on 21 February and scheduled to complete on 23 April.

As a reminder, the Company’s tightest Group gearing covenant is 150%, which compares with 65% as at 31 December 2019 (55% on a pro forma basis2).  The unencumbered asset ratio stood at 1.89x (2.08x on a pro forma basis) vs a covenant of 1.50x on the private placement senior notes.  Interest cover stood at 3.3x vs a covenant of 1.25x.  The Company has no LTV covenants at a Group level.  Secured debt facilities in the JV and associate structures are non-recourse to Hammerson.

Capital expenditure and administrative costs

At the 2019 full year results on 25 February 2020, the Company guided to capital expenditure of £140m for 2020, of which £63 million related to our on-site developments at Les 3 Fontaines, Cergy and Italik, Paris.  These projects are currently suspended as the workforce is unable to be on site.  Material deferrals and efficiencies have also been identified among the remaining forecast capital expenditure and no new expenditure will be committed in the near-term.

Significant savings have also been identified in property, administrative and service charge cost across all territories, with a reduction of c.40% on average expected for Q2 service charges in the UK & Ireland to support our brands.

2019 final dividend

The Board remains confident in the financial position of the business.  It is clear, however, that COVID-19 will have a material impact on the Group in 2020.  As a result, and given the significant uncertainty about the duration of the pandemic, the Board has adopted a prudent approach and decided that it is no longer appropriate to recommend the final dividend of 14.8 pence per share for the financial year ended 31 December 2019.  The resolution relating to the proposed 2019 final dividend will consequently not be put to a shareholder vote at the AGM on 28 April.

The Board is also retracting its dividend guidance for 2020, although it remains mindful of its REIT tax obligations.

The Board strongly believes that conserving liquidity is the right decision for the business, and in the long-term interests of shareholders and colleagues.

Guidance withdrawn

It is too early to ascertain and quantify the impact of the ongoing period of disruption on income, earnings, net assets and cash flows, and as a result we are suspending all previous guidance.  We will continue to closely monitor the developing situation and update the market as appropriate.


Josh Warren, Head of Investor Relations
Tel: +44 20 7887 1053
Catrin Sharp, Head of Corporate Communications
Tel: +44 20 7887 1063


FTI Consulting (for Hammerson)
Dido Laurimore
Tel: +44 20 3727 1000