Hammerson plc (HMSO · LSE)
Rent, Footfall and the Land Next Door
Hammerson is a landlord of major city-centre shopping destinations in the UK, Ireland and France, collecting rent from the brands who choose to trade in them.
Bull case for Hammerson plc
Owns landmark assets in prime locations
A small set of dominant city-centre destinations are where leading retailers are want to be.
Re-letting space at higher rents
New leases are being signed well above the rents they replace, lifting income over time.
Development land sits beside the shops
Spare land next to its centres can become homes or offices, or be sold on.
Bear case for Hammerson plc
Borrowings amplify property value swings
Debt against the portfolio magnifies both gains and losses when property values move.
Share issues dilute existing shareholders
Buying assets partly with new shares spreads earnings and asset value across more of them.
Retail tenants can fail or shrink
Store closures and online shopping can leave space empty and rents under pressure.