Hammerson owns 18 UK shopping centres and retail parks, including Victoria Gate in Leeds, pictured
Hammerson owns 18 UK shopping centres and retail parks, including Victoria Gate in Leeds, pictured

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Shopping centre owner Hammerson has moved to shore up its finances less than a week after its main rival Intu fell into administration, with retail landlords under pressure following a collapse in rents. 

Landlords’ incomes have dried up as the closure of shops in their properties due to the pandemic has led to tenants withholding rent. The company on Wednesday said it had collected just 16 per cent of its rent for the quarter to October, a week after it was due. 

Hammerson also announced that as it sought to cope with the cash crunch, it had tapped £300m from its revolving credit facility and lined up access to another £300m from the government’s Covid Corporate Financing Facility. 

The company’s share price rose more than 4 per cent to 84p on Wednesday after it said it had up to £1.5bn in available liquidity and had renegotiated a key covenant with lenders. 

Hammerson had “major structural differences to Intu. It’s debt structure is very different and it has a better ability to trade some of its assets”, said Colm Lauder, an analyst at Goodbody. 

Unable to win breathing space from its own lenders, the UK’s largest shopping centre owner, Intu, entered administration last week. 

But despite winning the backing of its lenders, Hammerson remains under pressure.

The group has clawed back some of the rent it was owed on the last quarterly payment date on March 25. But, after three months, the majority has still not been paid by tenants at its 18 UK shopping centres and retail parks, which include Brent Cross in London, Victoria Gate in Leeds and the Bullring in Birmingham.

Hammerson’s attempts to raise cash through the sale of seven of its UK retail parks to Orion European Real Estate Fund fell through in May, after the buyer backed out of a £400m deal. The company announced the departure of David Atkins, its chief executive for a decade, and chairman David Tyler shortly afterwards.

A number of key tenants including Hennes & Mauritz, Debenhams and Boots have cut rent payments, threatened to exit leases or, in the case of Debenhams, entered administration. 

The pandemic has put lease structures in the spotlight, with both tenants and landlords considering how to remodel agreements more equitably.

The virus “has undoubtedly exacerbated the structural trends and we are looking at what the future relationship between owner and brand is”, said Hammerson. 

British Land, owner of a number large commercial property estates across London and the south-east, received 36 per cent of what it was owed on June 24, and has waived £3m in rent for those tenants hit hardest by coronavirus. 

British Land’s office portfolio has been more resilient, with 88 per cent of rents received for the current quarter, said the company in an update on Wednesday. 

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