JP MORGAN CAZENOVE
Hammerson’s full-year results were better than expected, a similar trend seen with peers, as assets with quality income continue to surprise to the upside, in line with one of our main investment themes. We remain ‘overweight’, given the continued strong demand for prime assets and its modest loan to value ratio of 32 per cent.
While earnings were largely in line, the positive share price reaction is driven by the rise in net asset value, which was well ahead of expectations. The company recognises ongoing pressure on retailers in challenging economic conditions, but its prime portfolio, diverse tenant base and geographic spread leaves it well placed.
It was better than expected. There is still a little bit of concern over the rents of their City assets, but that is likely to resolve itself in the growth and the shortage of space over the next few years. Hammerson has also got a number of development assets, and is set for more positive news if it can get pre-lets for those properties.