Hammerson Plc, Britain’s third-largest real estate investment trust, reported annual profit that beat analysts’ estimates after rents grew more than expected.
Earnings before changes in asset values and one-time items rose to 20.9 pence a share from 19.3 pence a year earlier, the London-based company said today in a statement. That beat 19.9 pence, the average estimate of 20 analysts in a Bloomberg survey. Tenants signed new leases at an average of 4 percent more than expected rents, the company said. Net asset value rose 2.3 percent to 5.42 pounds a share.
Hammerson turned itself into a specialist retail-property investor last year as it sold its London office buildings. The company is looking for more retail projects in France and the U.K. after forming a venture with Westfield Group in January to rebuild part of the English town of Croydon, a project valued at about 1 billion pounds.
“High-quality retail assets combined with active management can deliver good income growth even in a challenging environment,” Chief Executive Officer David Atkins said in the statement. “We continue to seek opportunities to enhance the scale and efficiency of our business through further acquisitions.”
Hammerson gained as much as 2.6 percent and were up 1.7 percent at 503 pence as of 10:27 a.m. in London. The shares have risen 9.3 percent in the past six months, increasing the company’s market value to 3.59 billion pounds.
The value of Hammerson’s 22 percent stake in outlet village developer and operator Value Retail Plc rose 18.3 percent last year, according to the statement. Value Retail’s nine outlet villages in Europe are now worth 2.8 billion euros ($3.7 billion), Hammerson said.
Hammerson may be interested in buying properties offered by Ireland’s National Asset Management Agency, set up to purge the country’s banks of their riskiest assets, and other Irish lenders, Chief Financial Officer Timon Drakesmith said in a call with reporters.
Hammerson this year bought land at Beauvais, about an hour’s drive north of Paris, for a 23,700 square meter (255,000 square foot) project and Hennes & Mauritz AB will be the main fashion retailer at the development, according to the statement. There will also be a 3,000 square meter store leased to a unit of Carrefour SA, the developer said.
Net income fell to 138.4 million pounds from 335.7 million pounds after the company sold assets. Gross rental income declined to 295.7 million pounds from 303.9 million pounds.
The company increased its dividend by 7.5 percent to 10 pence a share