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Shopping centre owner Hammerson (HMSO.L) suffered significant losses in 2020 amid the coronavirus pandemic, and is attempting to sell of some of its malls to survive the crisis.
The company posted a £1.7bn ($2.4bn) loss on Friday — the largest in its history — after the COVID-19 pandemic wiped £2bn off the value of its property portfolio.
Hammerson, which owns the Bullring shopping centre in Birmingham and Brent Cross in London, said losses widened from £781m in 2019 to £1.7bn last year, as the value of its shopping centres in the UK, France and Ireland pummelled.
The portfolio value at the end of 2020 was £6.33bn, down from £8.32bn the year prior. This was driven by a 35.8% decline in its UK flagship retail destinations.
Net rental income for the year dropped 41% halving to £158m. All but essential businesses in the firm’s centres have been forced to shut for the majority of last year, with many shops have withheld or deferred rental payments.
It comes as the high street and shopping centres have fallen out of favour with shoppers, which have flocked to online shopping, and amid competition from online retailers, especially during COVID-19.
Chief executive Rita-Rose Gagné, who took over in November last year, said that Hammerson was "hit hard" as the company's "results show."
She added: "The retail sector, already in the grip of major structural change, has been significantly impacted by the restrictions imposed to tackle the pandemic, and we’ve also seen an increasing number of retail failures.
“Combined, this has resulted in the largest fall in net rental income and UK asset values in the group’s history.”
The CEO said that the priority of the company is focussed on "leading Hammerson through COVID-19 to safety," which would mean selling off malls and looking to refinancing options.
"This means further disposals to strengthen the balance sheet, managing refinancing, and sharpening our operations to maximise income."
Gagné added: "We will then focus on realising the quality of our destinations to drive the business forward. We are currently working on a thorough strategic and organisational review that will map out a route to future growth to transform the business in the context of what will remain a tough economic and structural backdrop.
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