Hammerson occupancy levels up as it sheds office to focus on retail

UK retail like-for-like sales increased 2.1% while footfall increased 0.4% in the 12 months to December 31.

The property developer said it will sell off its office assets to focus on its retail assets, which already account for 89% of its portfolio.

Hammerson said: “We concluded that Hammerson should be a specialist retail REIT focused on successful properties in winning locations.

“Our standing office investments will be sold over the medium term to maximise value, with capital redeployed to retail assets, increasing our retail focus and scale. Our aim is to be the best owner-manager and developer of retail property within Europe.”

Hammerson said the strategy will enable it to generate “superior returns through increased scale as we reduce costs”. It added it will “deepen retail relationships and lead the industry in capitalising on multi-channel opportunities”.

The owner of the Bullring in Birmingham said: “Looking forward, we are launching mobile websites and apps for shopping centres, and investigating ways of providing free wi-fi coverage throughout our entire portfolio, to ensure continuing accessibility and attractiveness for consumers.”

Hammerson added: “Global macro economic uncertainty and fiscal tightening will continue to have a major influence on our property markets. We believe that occupier and investment demand for retail space will be concentrated on modern, well-maintained properties in the very best locations, such as those owned by Hammerson. Properties without these attributes may experience rental and capital value declines in 2012.

“Despite a challenging retail backdrop, we are successfully growing net rental income in our retail portfolio. Our regionally dominant shopping centres and convenient retail parks continue to generate demand from successful retailers. We will increase our focus and scale in our chosen retail markets to capitalise further on structural changes in consumer behaviour.”

Hammeron operates centres including Bristol’s Cabot Circus and Brent Cross shopping centre.