Hammerson cuts 2020 dividend as store closures hit net rental income

[BENGALURU] British shopping centre operator Hammerson slashed its 2020 dividend by 46 per cent on Tuesday after reporting a drop in annual net rental income due to the collapse into administration of a series of UK retail chains and outlets.

The owner of the Brent Cross shopping centre said net rental income fell 11.2 per cent to 308.5 million pounds (S$558.6 million) for the full year ended Dec 31.

"Tenant restructuring, in the form of company voluntary agreements and administrations, has been the largest single factor reducing income," Hammerson said.

The company said it expects to recommend a dividend of 14 pence for 2020.

Hammerson has been looking to reduce its net debt, which stood at 2.8 billion pounds as of Dec 31, by offloading assets and refocusing on its city shopping centres and premium outlets division.

The London-based company said last week it will exit its out-of-town retail locations by selling seven of them to private equity firm Orion for 400 million pounds.

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Hammerson, which reported net asset value of 6.01 pounds, said it sold 542 million pounds worth of assets in 2019, ahead of its 500 million pounds target.

Rival Intu this month said it was in talks with its largest shareholder John Whittaker's Peel Group and new investors to raise funds to shore up its balance sheet.

REUTERS