Hammerson in ‘active discussions’ to open hotel at Victoria Leeds
Listed retail firm Hammerson, which owns the Victoria Gate Shopping Centre in Leeds, has this morning confirmed it is in “active discussions” for a new hotel in Victoria Leeds.
Within its half-year financial report for the period ended 30 June 2019, Hammerson announced that work on the scheme “could commence in 2020.”
Hammerson said that it would be seeking permission during 2019 to open a 8,400m2 Victoria Hotel. It also included a forward plan of projects that listed a 10-acre phase two development of Victoria Gate for development in 2021. The £165m first phase of Victoria Gate, which includes John Lewis, opened in October 2016.
The firm said its revenue for the period stood at £124m – down from £152m in the same period in the previous year. It also reported a £319m pre-tax loss; a huge drop from the £55m pre-tax profits made in 2018 as the retail sector continues to come under increased pressure.
In the period, it continued its focus on disposals, which totalled £456m; 90% of the £500m target it made for 2019.
At 30 June 2019, the value of the Group’s development portfolio was £624m, representing 7% of the Group’s total property portfolio. Hammerson said that 80% of the development value was related to five key schemes: Victoria Phase 2 in Leeds, Les 3 Fontaines extension in Paris, the Whitgift Centre in Croydon, Dublin Central and The Goodsyard.
Hammerson added: “The Group has a proven track record in delivering iconic, urban developments including destinations such as Bullring, Victoria Gate and Les Terrasses du Port. Capital expenditure is tightly controlled and we will only commit to projects when the balance of risk and reward is acceptable. Factors evaluated include funding and financial returns, cost and programme certainty, leasing confidence and pre-letting performance.
“Whilst projects are controlled individually, our total exposure to development is also closely monitored. Reflecting current uncertainty in the UK and wider retail markets, our near-term focus is to reduce debt and we do not expect to commit to any major projects until markets stabilise.”
Hammerson added that at Victoria Gate, Prestons is due to open a Rolex boutique in late summer whilst Aspinal of London will relocate to the Victoria Quarter. It also hailed the success of a pop-up shop by premium UK cycling brand Rapha at Victoria Leeds.
David Atkins, Chief Executive of Hammerson, said: “The UK retail landscape is undoubtedly challenging and traditional high street fashion is under pressure. However, our focus on shifting our line-up towards categories with greater customer appeal and rental growth potential has resulted in over 90% of new leasing to leading consumer and F&B brands. We’ve seen a stronger performance in Ireland and France, alongside continued exceptional results from premium outlets which demonstrates the benefits of our diversified portfolio.
“Our absolute priority remains to reduce debt. We stated our intention to achieve over £500m of disposals in 2019 and even in this tough environment where deals are taking longer to transact, we are now most of the way there. We will continue to pursue additional sales throughout 2019 and into 2020 to further strengthen our balance sheet.”
