Shopping centre giants Hammerson and Intu see rent payments fall short

British property giants Hammerson and Intu have both announced they have received just a fraction of the rent payments they were expecting to collect from their store portfolios as Covid-19 continues to disrupt the retail industry.

Hammerson, which owns Bullring shopping centre in Birmingham, said that two days after its rent deadline it had received only 37 percent of payments from its properties and stores in the UK.

Adjusted for rent that has been deferred, switched to monthly payment, or waived, Hammerson received 57 percent of due rent. “We anticipate both figures to increase as temporary agreements are implemented and further cash is collected,” the company said.

The news comes after last week prime minister Boris Johnson announced the immediate closure of all ‘non-essential’ stores across the UK in an effort to curb the spread of the coronavirus.

Hammerson said in its update: “In these circumstances, we believe we should support our occupiers, particularly smaller and independent brands that are less resilient to the closure of their space in our centres. We have received a variety of requests for rent deferrals, monthly payments, and waivers, which we are reviewing on a case-by-case basis, taking into account the business model and risk profile of the occupier, alongside the aid made available by the relevant governments.”

Similarly, British shopping centre operator Intu, which owns Manchester’s Trafford Centre and Lakeside in Essex, announced last week that for the second quarter of the financial year it had received just 29 percent of due rent. For the same period last year, it had received 77 percent by that time.

Intu said in a statement: “The reduced social activity is likely to continue for the foreseeable future impacting our footfall and potential future rents. The impact of the reduced rents received is expected to require us to seek covenant waivers and we are in constructive discussions with the relevant lenders.”

The company said that as of 24 March, it had immediately available cash and facilities of 184 million pounds at the corporate level.

Photo credit: Grand Central, Hammerson