Hammerson Malls Buoyed by UK Recovery as Rent Income Rises

An economic recovery in the UK, powered in large part by rising consumer spending, helped lift shopping mall owner Hammerson's profit in 2013.

Hammerson, which owns the Bullring in Birmingham and the Italie Deux in Paris, said its rental income rose 2.1% across the year to £282.8m (€345.8m, $474m) because of higher tenant demand. Its occupancy rate rose to 97.7%, above its 97% target. Profit before tax hit £341.2m during 2013, up from £142.2m the year before.

The UK economy grew by 1.9% over the year, the fastest rate since 2007. The squeeze on wages, which are in real terms decline, is also easing as the gap between price inflation and pay growth narrows.

"We have reported a good set of results in a year when we saw the beginning of economic and consumer recovery in the UK," said David Atkins, chief executive of Hammerson.

"We are seeing improving demand from retailers, and Hammerson is creating the right product to meet their future requirements, which provides the conditions for selected growth in rental values."

Atkins said that in France, where Hammerson does a lot of trade, the economic picture "is less clear cut although personal debt levels remain low, providing the opportunity for a rebound in consumer spending when growth returns."

The French economy did not sink back into recession at the end of 2013 as many had feared it would, growing by 0.3% across the whole year. In the fourth quarter, household consumption growth picked up pace to 0.5% from the previous quarter's 0.1%.