INTU SGS and Debentures - comment

Hammerson, the listed shopping centre owner, has released an operational and rent collection update for Q3. The quick takeaways are improved rent collection with FY22 adjusted earnings ahead of guidance and market expectations. Gross rental income has increased by 11%, with improved collections, and strong leasing performance. Footfall is improving in UK and Ireland at 90% of pre -Covid levels (INTU shopping centres are slightly higher). Demand for prime retail space remains strong.

Overall, Hammerson’s statement just confirms what we are seeing monthly from Debentures and SGS. We take comfort that Hammerson remain confident in their non-core disposals and are sticking to their original end-of-FY23 guidance for completion. This reiterates our view that confidence is returning to the commercial real estate market in the UK despite recent rate moves.