Mall operator Hammerson to raise 825 million pounds to ride out pandemic

British shopping centre operator Hammerson plans to raise 825 million pounds ($1.1 billion) from a rights issue and the sale of its 50% stake in VIA Outlet to see it through the COVID-19 crisis, it said on Thursday.

The owner of London’s Brent Cross shopping centre said it would reboot the terms of its leases after struggling to recoup rent owed by its tenants and as it faced a slump in footfall and the value of its properties.

The coronavirus has left many retailers and retail landlords struggling, and pushed Hammerson’s biggest rival, Intu, into administration in June.

Hammerson said it aimed to raise 552 million pounds from the planned rights issue, and 274 million pounds from the sale of the stake in VIA Outlets, adding that it would increase the scope of its disposal programme.

Its rental income plunged 44% to 87.3 million pounds in the first half of the year, while adjusted profit collapsed to 17.7 million pounds from 107.4 million pounds a year earlier.

“The pandemic has served to accelerate the changes that were already emerging in the retail landscape, heightening uncertainty and further reducing occupational and investment demand,” said Hammerson.

It said the deals, which are backed by two of its largest shareholders – APG and Lighthouse Capital – will bolster its financial position.

Shares in Hammerson, which have plummeted 80% so far in 2020, were down 4% by 0723 GMT.

“We still question broader investors’ appetite for the shares in the current market, and think 1.3 billion pounds is more like the capital needed to restore the balance sheet to a more comfortable level,” Liberum analysts said.

Hammerson suspended its guidance and dividend in March, and in July it received approval for issuance of up to 300 million pounds under the government’s COVID Corporate Financing Facility.

It now expects to resume dividends in the second half of 2020.

($1 = 0.7609 pounds)

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