Hammerson says UK retail strength offsets 'subdued' France
Shopping centre owner Hammerson has said that conditions in the UK retail market have improved since the half-year stage but are still subdued in France.
Successful 'Back to School' performances by retailers and strong growth in menswear, catering and jewellery pushed sales across UK shopping centres 2.8% higher in the third quarter ended 30 September. Year-to-date UK retail sales were up 2.6%.
Sales from French shopping centres were 0.5% higher than the previous year in the third quarter but were still down 2.8% for the first nine months.
The company, which owns the Bullring shopping centre in Birmingham and Brent Cross in London, said long-term leases were achieved 9% above estimated rental value (ERV) across the group and 8.5% ahead of previous passing rents.
Retail leases were struck 15% above ERV in the UK but just 1% above ERV in France.
"Rent from new leases signed at UK shopping centres to September 2014 have already surpassed the total figure achieved for 2013, demonstrating continued retailer confidence and appetite for strong retail space," Hammerson said.
Occupancy across the whole portfolio was steady year-on-year at 96.7%.
The group is continuing construction work at Victoria Gate in Leeds and Jeu de Paume in Beauvais, and is looking to redevelop sites in Croydon and Cricklewood (Brent Cross) in London.
Chief executive David Atkins said: "Earlier in the year we saw signs of improvement in the UK retail market and since then we have experienced further growth in retailer sales, tenant demand and rental values in our winning retail locations.
"In France, there is continued appetite from both consumers and retailers for outstanding retail destinations despite a more muted consumer backdrop."