Hammerson, the UK-listed owner and manager of retail and leisure complexes in the UK, France and Ireland, said it was reporting a record year of leasing following what it termed a transformative year in results for the year ended 31 December 2024.
The REIT said it was reporting strong operational performance, with leasing ahead of previous passing rents and estimated rental values (ERV).
By 9.01 am Hammerson shares were trading down 3.05% on the results at 280.56p to give a market capitalisation of £1.36 billion.
The market was likely responding to the REIT also reporting a tenfold increase in its IFRS losses of £526 million for 2024 from a loss of £51 million in 2023, reflecting a £497 million impairment of its Value Retail outlet centre portfolio before the £595 million sale of its stake in September.
Adjusted earnings came in at £99 million, down from £116 million, reflecting the impact of disposals.
Like-for-like gross rental income (GRI) is up 1.6% year-on-year, with up to 7% growth from assets "benefiting from recent investments", Hammerson said.
It said the record leasing comprised 262 leases signed on 1 million square feet of space, generating annual headline rent of £41 million. The record was on a like-for-life basis with market lettings 56% above previous passing rent and 13% ahead of ERV.
Footfall is growing at its centres with 170 million visitors in full year 2024, up 2% across the group, with the UK up 2%, France up 4% and Ireland up 1%. There is reduced vacancy with occupancy improving to 95%. Hammerson described "rental tensions" across its portfolio.
Occupier demand remains strong with £8.6 million of headline income already exchanged in 2025, and good visibility and a strong pipeline for the remainder of 2025.
Hammerson said it materially strengthened its balance sheet in 2024 thanks in part to completing the non-core disposal programme of £500 million and the strategic disposal of its stake in Value Retail. Loan to value is down to 30% from 34%.
Net debt down was 40% at £799 million. There was a closing portfolio value of £2.659 billion, down slightly from £2.776 billion last year.
The board recommended a final dividend of 8.07p per share for 2024 in line with the new policy of 80-85% of adjusted earnings, and making a full-year dividend of 15.63p, up 4% year on year.
It has been reinvesting, targeting acquisitions of stakes in its shopping centres as well as investment in repurposing. It said talks with its joint venture partners to buy in stakes were on going.
It said capital deployed in Bullring in Birmingham and Dundrum in Ireland has generated rents in excess of £184 million. The repositioning of Cabot Circus in Bristol and The Oracle in Reading has already secured £52 million of rent, with "marquee openings" in 2025 such as M&S and Odeon at Cabot Circus, and Hollywood Bowl and TK Maxx at The Oracle.
It immediately recycled £135 million to gain 100% control of Westquay in Southampton at a "significantly more attractive yield". Hammerson said it continues to see opportunities for joint venture consolidation.
Among a number of major developments at land around its complexes it flagged a "compelling residential redevelopment opportunity" of over 700 apartments at the underutilised Edgbaston Street car park at Bullring in Birmingham.
There was a further 16% cost reduction. Net headcount is down 76% since full year 2020 to 125, which has enabled Hammerson to invest in "new skills and capabilities in customer insights, placemaking, digital marketing and engagement".
Speaking to CoStar News, Rita-Rose Gagné, chief executive, said: "Altogether 2024 has been particularly transformational with three highlights. We have delivered the strength in balance sheet, and we now have a balance sheet to grow. We have had a strong operational performance and thirdly we landed the sale of our non core portfolio and our stake in Value Retail. We now own estates that are all in the top 20 in terms of retail performance and the 1% of retail spend. We are now at 30% leverage after having invested in the acquisition of West Quay to own it 100% and we had another record year of leasing."
Gagné said that in January and February there had been the same amount of momentum. "The reason is we have reduced vacancy to under 5%. That enables us to better think about how we curate the asset and lease it up and it gives us rental tension. Q4 was a really strong quarter and Black Friday, Christmas time and New Year's Eve were really strong."
Gagné said Hammerson had been able to increase the dividend by 4%.
"The three trends around which we are aligned is is cities, these are the assets that really grow; secondly it is a trend around the fewer, better, larger stores - brands want to be where people are and we need to be in those top assets; thirdly it is the trend of the experience and physical experience that has become more and more relevant. 80% of sales touch a physical store and that is the new normal. With these three points in mind that explains our underlying growth. The next chapter is focusing on drivers of our growth. Driving leasing, creating the right mixes, placemaking and events; acquisitions in the existing portfolio and in the market; and the land development opportunities."
In terms of the new government, Gagné said: "The headline from government is really good about growth and more efficiencies in the planning system. We will have to see how that develops but the headlines itself is good."
Gagné said in a statement with the results: "Investment in our destinations and our unique and specialist platform provides data-driven insights to curate the right product, placemaking and mix of brands. This platform is scalable and agile, driving tangible benefits with higher occupancy, leasing, footfall and sales above national benchmarks, whilst growing our catchment and market share. There is more to come.
"We are confident in our strategy and optimistic about the opportunity ahead for Hammerson. We continue to maintain a tight operational grip and are poised to deliver significant revenue and underlying earnings growth, with the full impact of our ongoing investments and acquisitions yet to be realised.”