Hammerson shrugs off retail sector trouble, reporting 4% sales rise at premium outlets

Property developer Hammerson provided a first quarter trading update today in which it reported a good level of leasing activity and better than average activity at its, mostly retail-focused, assets. The group said net asset value per share had risen 1.8% in the quarter, to 790p, with premium outlets such as Bicester Village and Ireland driving growth. Sales at premium outlets rose 4%, better than the 2% drop seen across the UK as a whole.

Proposed acquisition of Intu has been put on hold

Interested investors may want to note that the proposed acquisition of peer Intu has been put on hold until there is more clarity on the takeover bid by French group Klepierre. It offered a mixture of cash and shares worth 615p in early March but Hammerson rejected this comprehensively. Klepierre has until 16 April 2018 to raise its offer or walk away from the deal.

The Share Centre recommends Hammerson as a ‘hold’ for medium risk investors

It was good to hear that Hammerson’s retailers are outperforming the market but today’s update must be seen in the context of the bid from Klepierre. The shares responded well to the news but are still trading at a 31% discount to NAV. We retain our ‘hold’ recommendation due to the strength of the premium outlets, and the big discount to NAV, although the weak backdrop of retail sales and the growing challenge of online retailers like Amazon are concerns.

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.