Hammerson collects just 16 per cent of third-quarter UK rent
Retail property giant Hammerson said it had received only 16 per cent of the rents it is owed in the UK so far this quarter, as the coronavirus pandemic weighs heavily on the sector.
As of 29 June, the shopping centre operator said it had collected 73 per cent of UK rents for the first half of 2020, while it had received 53 per cent in France and 72 per cent in Ireland.
To help with recovery it said it has received approval for issuance of up to £300m under the government’s Covid Corporate Financing Facility (CCFF), bolstering its maximum liquidity to £1.5bn.
The Bullring and Brent Cross owner has also drawn down a further £300m from its existing credit facilities.
Investors were concerned for Hammerson’s financial health following the collapse of rival Intu into administration last week, sending Hammerson’s shares down as much as 15 per cent on Friday as a result.
Hammerson previously had the opportunity to buy Intu in 2018 for £3.4bn, but walked away from the deal.
Intu had failed to reach an agreement in financial restructuring talks with lenders, leaving its centres now in the hands of adminstrators KPMG.
This morning as traders took stock of the news, Hammerson’s share price rose almost four per cent.
“The company is confident that collection rates will continue to improve materially in all regions as agreements are progressed with brands,” Hammerson said.
Ramzi Kattan, a vice president at Moody’s said of the sector’s future last week: “The coronavirus crisis has accelerated structural changes for Europe’s retail sector, thereby battering the credit quality of retail landlords.
“We expect materially lower operating earnings and cash flow over the next six months because of tenant failures, subdued leasing activity and existing retail tenants requesting payments deferrals, discounts and even waivers.
“Intu’s potential bankruptcy is a result of this current challenging environment, with many other retail landlords likely to struggle and rely on their lenders for forbearance.”