Hammerson's attention to detail pays off

A hands-on approach has allowed the group to outperform the broader market, while an increase in net rental income and a small valuation uplift on the portfolio helped to push adjusted net asset value ahead by 5 per cent to 776p a share.

Hammerson also benefited from its diverse portfolio, with rental growth in France and Ireland helping to offset a tougher UK market. However, its domestic portfolio of shopping centres still delivered modest growth in both rental income and footfall. However, retail parks, which tend to be in out-of-town locations, saw both lower footfall and negative rental growth. Even here, though, the underlying picture was brighter, because the previous year included a number of surrender premiums arising from tenant rotation; something that was not repeated in 2017. So, on a like-for-like basis, net rental income would have grown by 2.4 per cent.

The strongest growth came from so-called premium outlets, of which Hammerson has 20 sites across 14 European countries. Annual earnings growth here is averaging 9 per cent, with tourists in particular attracted to the idea of buying higher-end luxury and fashion items at discounted prices. Demand in the UK has also been aided by sterling’s overall weakness attracting overseas customers. This sector now accounts for a fifth of the group’s property portfolio and includes high-end locales such as Bicester, where Hammerson spent £76m on acquiring further premium outlets and taking its economic interest to over 50 per cent. New investments have been financed by capital recycling, with £400m of disposals made in 2017.

Analysts at Peel Hunt are forecasting adjusted net asset value at the December 2018 year-end of 788.7p per share.