Hammerson puts major construction work on hold

Grant Prior 11 months ago
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Hammerson has put a hold on starting construction of any major developments in the UK.

Brent Cross is on hold until 2020 at the earliest

The developer is focusing on selling more than £500m of property assets to pay down debts while values continue to fall in the UK.

Hammerson confirmed last summer that it will be delaying  the start of a planned £1.4bn extension of the Brent Cross shopping centre where Laing O’Rourke is lined-up as main contractor.

In its latest results released today the developer said: “Reflecting the heightened uncertainty levels, particularly in UK retail markets, in July we decided to defer the start on site at Brent Cross.

“Given our focus on reducing debt during 2019, we do not expect to commit to any major projects until markets stabilise.

“Capital expenditure is tightly controlled and we will only commit to projects when the balance of risk and reward is acceptable.

“Factors evaluated include funding and financial returns, cost and programme certainty, leasing confidence and pre-letting performance.”

Projects now on hold until 2020 at the earliest include Brent Cross, the Whitgift Centre in Croydon and The Goodsyard in the City of London.

Hammerson also unveiled its “City Quarters” concept with plans for residential next to retail with up to 6,600 homes proposed across the country.

David Atkins, chief executive of Hammerson said: “2018 was a tough year particularly in the UK.

“Tenant failures, the structural shift in retail and a more considered consumer created a difficult operating environment, putting pressure on property values.

“We believe that a successful deleveraging programme will best position Hammerson for the current environment and beyond.

“Disposals will also enable us to prove the inherent value of this business – which we believe is not recognised in the current equity market.

“Having successfully achieved £570m of disposals in 2018, we are aiming to dispose of at least £500m in 2019.

“We remain committed to exiting retail parks over the medium term and are in active portfolio-wide discussions on transactions of over £900m, which would add further strength to our balance sheet.

“Over the longer term we will generate opportunities to create additional value through City Quarters, which will see us transform many of our city venues beyond pure retail into successful, thriving neighbourhoods.”

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