Tuesday 25 April 2017

Dundrum owner records rent rises of 8pc last year and predicts further hikes in year ahead

UK property group Hammerson said rent reviews produced higher yields of 8pc last year
UK property group Hammerson said rent reviews produced higher yields of 8pc last year

Sean Duffy

Rent reviews undertaken at some of Ireland’s most well-known shopping centres resulted in a rise in rates of 8pc for tenants last year.

Hammerson, the owner of Dundrum Town Centre and the Ilac Centre in the capital’s city centre, said it forecasted that rents this year would rise by 7pc as a result of further rent reviews. Net rental income from the company’s Irish operations totalled £14m (€16.3m) for last year.

The company  also said that rents at the longer term rents at the sites would lead to a rise of over 10pc in rental income between now and 2019.

In Ireland, Hammerson said it had an occupancy of 99.5pc. The company said it was primarily focussed on the Dublin market, with 70pc of retail expenditure concentrated in the capital.

The company said its Irish operations have been bolstered by the purchase of a NAMA portfolio in 2015. Hammerson owns the Dundrum Town Centre in equal partnership agreement with insurance giant Allianz. The Ilac Centre is co-owned with Irish Life.

Hammerson said it also has plans to develop an additional 100,000 square foot of retail space on the six-acre estate it currently owns in Dundrum.

Plans are also afoot to further redevelop its Dublin Central facility with a 158,000 square foot development, although the company noted that this was the subject of a High Court Challenge.

A further 272,000 square feet of retail space has been earmarked for development in Swords. Hammerson said no additional land purchases would be required to complete the purchase. The company said it expected to generate €50m in revenue from renting to 300 tenants at the site.

The size of Hammerson's international property portfolio rose by 19pc last year, according to the annual results.

Hammerson’s property portfolio increased to £9.97bn in 2016, up from £8.37bn in 2015. Rental income over the course of the year rose to £346m, up 8.8pc.

The group’s adjusted profit was £230m, which represented a 9.4pc rise on the previous year.

Hammerson also disposed of £635m worth of assets from its portfolio but added a major strategic investment with the purchase of the Grand Central in Birmingham.

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