MARKET REPORT: Shopping centre-owner Hammerson slumps to all-time low after stricken retailers pay just a third of rents
Shopping centre-owner Hammerson slumped by a fifth to an all-time low after stricken retailers paid just a third of rents.
The group, which owns Brent Cross in London and the Bullring in Birmingham, received 37 per cent of rents due for April to June.
Apart from supermarkets and shops deemed to be providing essential services, all other retailers have been under orders to close since last Monday as the Government tries to halt the spread of coronavirus.
Many chains now struggling to survive were already cash-strapped and vulnerable after years of shoppers opting to spend less and move their spending online.
Hammerson, which has suspended its dividend to save cash, said it believed it should support tenants – especially smaller and independent brands.
It has been swamped by requests to defer rents, waivers and switches to monthly rather than quarterly payments, which it will consider on a case-by-case basis. When already-agreed requests to defer payments or moves to monthly payments were taken into account, it had received 57 per cent of rent due.
Hammerson can tap into a pot of £1 billion of lending and is due to get £395m from the sale of a slew of retail parks at the end of next month. And it is pulling ahead of rival Intu, which owns the Trafford Centre in Manchester and said last week it had received just 29 per cent of rents.
But Hammerson shares still plunged 22.1 per cent, or 18.86p, to 66.4p last night. Intu meanwhile, barely shifted and closed at 4.5p. London’s two main indexes went in different directions last night. The FTSE 250 edged 1 per cent lower, or 145.17 points, to 14624.63, while the FTSE 100 rose 1 per cent, or 53.41 points, to 5563.1874, despite some of Britain’s major industrials companies tumbling into the red.
The likes of Meggitt and RollsRoyce plummeted as JPMorgan cut earnings estimates for companies that supply aeroplane makers. Widespread travel restrictions have cancelled thousands of flight routes worldwide and Easyjet (down 7.2 per cent, or 42.8p, to 552p) yesterday chose to ground its entire fleet.
JP Morgan’s bearish forecast came as the Government ordered 10,000 ventilators for the NHS from a consortium involving Meggitt (down 13.2 per cent, or 41p, to 269p) and Rolls-Royce (down 11.9 per cent, or 43.4p, to 321.3p). GKN-owner Melrose was also hit by the downbeat outlook for industrials groups, closing down 17.6 per cent, or 18.7p, to 87.5p. But Melrose put out a trading update saying it was cancelling its dividend, cutting costs, ‘taking advantage’ of Government schemes that could help employees and had agreed looser terms with its lenders.
Another broker note from JPMorgan sent Cineworld shares tumbling 12.4 per cent, or 6.62p, to 46.86p. Brokers downgraded the business to ‘neutral’ from ‘overweight’ and trimmed its target price from 300p to 90p.
They said that although the cinema chain had enough cash to survive temporary closures in the first half of this year they ‘cannot recommend investors buy the stock’ during the crisis.
Elsewhere, retailer Ted Baker appointed its acting chief executive Rachel Osbourne into the top job permanently. But she received an unwelcome hello from investors, as shares dived 10.7 per cent, or 12.9p, to 107.6p.
And podcast maker Audioboom rose just 0.6 per cent, or 1p, to 155p, after it said a sale of the business was likely to go ahead despite the choppy market conditions. Revenues almost doubled last year at the group, rising 91 per cent to £18m as losses narrowed from £6.9m to £5.8m.