Hammerson upbeat on new centres

Some 75% of Hammerson's business comes from retail real estate

Property firm Hammerson has seen pre-tax losses of £417.1m in the first six months of 2008, after cutting the value of its property portfolio by 9.2%.

But the firm, which made the move amid the slowdown in property markets, said that charging more rent meant underlying profits grew 10% to £60.5m.

And it said two new retail projects had secured 85% of their predicted rent.

Bristol's Cabot Circus and the Shires Centre extension in Leicester are due to open next month.

Up to 75% of Hammerson's business comes from its retail property business and it has interests in 14 shopping centres and 19 retail parks across the UK and France.

Funding issues

Hammerson has seen growth in net rental income of 4.4% on a like-for-like basis and as of June 30, its vacancy rate was 2.3%.

Despite this, the company said it did not foresee any new projects before summer 2009.

The global credit crunch has seen companies struggling to secure funding and finish projects that were in the pipeline as the financial difficulties hit.

In order to encourage uptake in its centres, Hammerson has increased the rent-free period at its new retail developments.

It will now offer a rent-free period of between 21 and 24 months as opposed to the standard six months on a 10 to 15 year lease.