Hammerson Prices EUR350m Bond Amid Upbeat Operational Performance

Hammerson (LON: HMSO) said Thursday that it has successfully priced a EUR350 million bond maturing in 6.5 years, signaling strong market confidence in the company's strategic direction.

The bond, priced at 110 basis points over euro mid-swaps with a 3.5% annual coupon, was oversubscribed five times at its peak, demonstrating robust investor demand.

This issuance marks the initial phase of refinancing Hammerson's EUR700 million 1.75% Sustainability-Linked bonds due in June 2027. Proceeds will be used to proactively manage the company's debt profile and extend its maturity runway.

The bond's successful pricing follows a recent upgrade by Fitch, raising Hammerson's senior unsecured debt rating to A- and the Long-Term Issuer Rating to BBB+. Moody's also revised the company's Baa2 rating to a Positive Outlook, further validating Hammerson's improved financial standing.

Consequently, Hammerson has updated its FY25 earnings guidance to approximately £101 million, reflecting the positive impact of the bond issuance. This revised guidance takes into account the expected reduction in interest expense resulting from the refinancing activities.

Hammerson's operational momentum remains strong, particularly during the key summer months (June to August). UK footfall increased by 6% year-on-year, translating to an additional 1.3 million customer visits. French destinations also saw a 5% increase, while Dundrum experienced a 3% rise, all surpassing national benchmarks.

Standout performances in the UK include the Bullring (+12%), The Oracle (+9%), and Cabot Circus (+5%), boosted by repositioning initiatives and new store openings. These improvements are part of Hammerson's broader strategy to enhance the appeal of its retail destinations.

Strong footfall growth has fueled like-for-like sales growth for Hammerson's brand partners. In the UK, sales were up 4% over the summer, while the Group as a whole saw a 2.4% increase. This positive trend underscores the value of Hammerson's properties to retailers.

Leasing demand for prime space remains robust, with 71 long-term deals exchanged during the period, representing £10 million per annum of headline rent (at 100%). These lease agreements were signed at rates 29% above previous passing rent and 15% above ERV on a net effective basis, with the UK delivering the strongest performance at 22% over ERV.

Rita-Rose Gagné, CEO of Hammerson plc, commented: “We are delighted with the high levels of demand for our bond issue, a testament to the strength and success of our strategic delivery. We continue to invest in destination repositioning and leasing to drive returns while our JV buyouts have enabled us to take full control of our assets and grow income.

“Demand for our prime space is robust, as evidenced by the operational performance we drove over the summer. Momentum is continuing into September and October and we have a strong pipeline ahead.”