Hammerson eyes leisure and co-working space as future anchors

Managing director of UK and Ireland at the institutional landlord Mark Bourgeois said Hammerson was in the process of moving away from high street fashion brands across its schemes and was looking more at leisure offerings, “aspirational, contemporary fashion brands” and even co-working space to anchor flagship sites in future.

“The types of occupiers we’re looking at include leisure – we’re talking to some really excellent and exciting leisure concepts. It’s an opportunity even for fashion operators who are in a store that may be substandard or sized to take a flagship statement in a scheme.

“Those are the types of discussions we’re having with some of the more contemporary fashion brands,” he said.

“Then there’s co-working spaces. We see co-working, particularly on upper floors of schemes – there’s some strong demand for co-working.”

Income fall

Hammerson, which owns shopping centres such as London’s Brent Cross, saw its net rental income fall 6.8% in the first half of the year due to “CVAs and administrations”.

Bourgeois said the number of retailers undergoing CVAs has made negotiating with new and existing retail tenants more difficult when it comes to rental values and lease lengths.

“In the wider UK retail property market there are some very big discounts going on,” he said. “It’s not in any way making negotiations over rents any more straightforward.

“There’s no doubt that retailers, whether they are healthy or looking to go through some restructuring, are looking at the market and trying to get the best possible deal that they can get.”

Due to the travails facing the retail sector, Hammerson has confirmed it is looking at repurposing up to a fifth of its high street fashion tenants and a quarter of department store tenants. 

Bourgeois said that, while “the department store is not dead”, struggling chains such as Debenhams and House of Fraser offered the landlord the opportunity to “reduce space or replace whole units” within schemes.

He said 90% of new lettings in the first half of the year on Hammerson schemes were made to “operators in food and beverage, non-food and aspirational fashion”, and these occupiers were “at levels up to 27% above the previous passing rent” paid by high street fashion retailers.

Hammerson today also announced it had submitted a planning application to Birmingham City Council for the regeneration of its Martineau Galleries site – the first application as part of its City Quarters concept.

The concept, which focuses on “mixed-use neighbourhoods surrounding existing flagship destinations”, is set to be a “major focus” for Hammerson in the medium to long term, said Bourgeois.