Hammerson's rental income impacted by retail closures

Hammerson saw net rental income drop during the first half of its trading year as rentals were impacted by an increased level High Street closures throughout Britain and Ireland.

Like-for-like net rental income dipped 0.1% across the group as a whole, while UK flagship destinations reported a 6.8% drop on NRI. However, Hammerson's premium outlets did report an 11.1% increase in NRI as its "sustained exceptional performance" accounted for 27% of the group's property portfolio.

Adjusted earnings per share fell 7.4% to of 14p as a result of the firm's ongoing disposal programme, while interim dividends were unchanged at 11.1p.

Hammerson's net asset value per share slid 7.2% to £6.85 as low transaction volumes and a weak UK retail market impacted portfolio valuations.

The UK-based real estate investment trust also revealed it had exchanged contracts with AXA Investment Managers to dispose of a 75% stake in Parisian shopping destination Italie Deux and the forward sale of 75% of the Italik extension for a total of £423m.

Hammerson said the disposal reflected a 4.1% net initial yield on Italie Deux, while the total sale price represented an 8.5% discount to the site's December 2018 book value and took the group's total disposals for the year to £456m and over 90% of its £500m target.

As part of the transaction, the FTSE 250-listed firm will complete the Italik extension at an estimated cost of £18m, delivering a further 1,900 square metres of retail, 1,800m2 of food and beverage, 1,500m2 of co-working and innovative activities and 1,200m2 of events and leisure space.

The Italie Deux element of the transaction was expected to complete during autumn 2019, with proceeds being used to reduce Hammerson's £3.1bn net debt and build further balance sheet strength, while Italik was due to open in September 2020.

As of 0820 BST, Hammerson shares had inched back 0.33% to 269.60p.