Our opinion on the current state of HAMMERSON(HMN)Hammerson (HMN) is a massive international property company that has listed on the JSE to take advantage of South African investors who want exposure to offshore property investments. The company has re-focused itself to invest only in "...flagship retail destinations and premium outlets." The objective is to try to keep up with modern trends in online retail technology and consumer demand for a sophisticated digital experience. Obviously, the company's UK properties have been impacted by the Brexit policy. Their new strategy has meant that they are selling off properties which they see as "non-core".
The company's rights issue was very dilutive because it took place when sentiment was very negative. Since listing on the JSE on 1st September 2016 at R115 per share, the share price fell to 330c, but it has recovered to 463c. In its results for the six months to 30th June 2024 the company reported earnings of GBP50m, down from GBP56m due to disposals and a loan-to-value (LTV) of 39%. Occupancy was 94% and footfall rose by 1%. The company's gross administration cost was down 16%.
The company said, "Like-for-like (‘LFL’) GRI +2%, LFL NRI +2%. Excluding Cabot Circus, in repositioning, LFL GRI +4%; LFL NRI +5%. Leasing value up 24% year-on-year to £23m, or £13m at share, from 140 deals. Positive leasing spreads maintained: permanent deals signed +61% vs previous passing (+29% excluding nil previous passing rent); net effective rent +10% vs ERV." The share has risen from a low of 360c at the end of September 2022 to a current level of around 675c. At that price, it is trading for about 75% of its net asset value (NAV). It remains a rand hedge.
