Bullring owner seeks to reinvent its shopping centres after £429m loss

The owner of the Bullring and Brent Cross is reinventing its shopping centres by switching away from fashion retailers towards healthcare, hospitality and flexible workspaces after reporting a £429m loss.

Hammerson said in future as much as a fifth of its portfolio could have switched to alternative uses including homes, hotels and offices. Fashion will go from occupying more than a third of space to about a sixth, according to the property group. Last year about 70% of the group’s deals were not in fashion, indicating the direction of travel.

The group will also repurpose redundant department stores and other unwanted retail space by bringing in private clinics and work with the NHS, education operators and leisure operators.

Rita-Rose Gagné, the chief executive of Hammerson, said: “The pandemic has accelerated trends in our operating environment, with people engaging with physical space in new ways. We own flagship destinations around which we can curate and reshape entire neighbourhoods and city centre spaces.

“Our new strategy recognises the unique position that Hammerson has in urban locations and the opportunities to leverage our experience and capabilities to create appealing destinations, serving occupiers, customers and communities.”

Gagné said the company was focused on its “prime urban estates”, having sold off £623m of property since 2021 and cut its workforce by 18%. Those actions helped reduce net debt to £1.8bn by December, down £415m year on year.

In the past few months Hammerson has also sold the Victoria Gate retail development in Leeds for £120m, and is on course to complete the sale of Silverburn shopping centre in Glasgow for £70m by the end of March. The sales are part of £500m of assets expected to be offloaded over the next two years.

The change in tack comes after a tough few years for the group and many other retail landlords as pandemic lockdown forced some retailers out of business while others delayed or failed to pay rents.

The value of Hammerson’s portfolio fell by nearly 8% to £5.4bn for the year. The decrease followed a 21% fall in 2020. Retail incomes also continued to fall – down 16% to £241.6m.

Hammerson made a loss of £429m in the year to 31 December, largely due to a £470m fall in the value of its properties. However, that compared with a £1.7bn deficit a year before.