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Hammerson’s rent collections show signs of recovery as Irish occupancy rates rise

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Hammerson owns Dundrum Town Centre with German insurer Allianz

Hammerson owns Dundrum Town Centre with German insurer Allianz

Hammerson owns Dundrum Town Centre with German insurer Allianz

Retail property firm Hammerson has said that occupancy at its Irish flagships improved to 96pc in the first half of the year.

The company co-owns Dundrum Town Centre with German insurer Allianz, as well as half of the Pavilions shopping centre in Swords, the Ilac Centre in Dublin City Centre and 40pc of Kildare Village.

The commercial property group is active in seven countries, including a number of flagship retail centres.

For the first half of the year, sales were up 3pc on 2019 levels in Ireland. In Hammerson’s UK locations, sales were up 2pc but were around 5pc below pre-pandemic levels in France.

Hammerson also noted an improvement in rent collection in the first half of the year, with 94pc of rent for last year now collected. 92pc has been collected for the first half of this year.

Commercial tenants from the company’s Irish locations paid £17.3m (€20.6m) in rent for the first half of the year, a 44.7pc increase compared to the same period last year.

In October last year, Hammerson said that 29pc of its Irish commercial tenants were behind on rent.

The estimated rental values of occupied space (ERVs) in Ireland were up 0.5pc, with ERVs in Dundrum rising 0.6pc. This was driven by the opening of Brown Thomas in the former House of Fraser unit in February, with Penneys relocating into the remaining space in the first half of next year.

The retail property firm also said there was limited retail investment activity recorded in Ireland in the year to date, with retail representing just 3pc of total transactions.

Hammerson is also looking to develop a 107 private rented sector (PRS) scheme, the Podium, in Dundrum. The company anticipates work will commence in the second half of the year.

The Podium will serve as a prove of concept for a larger Dundrum estate of almost 900 residential units.

As a result of increased economic uncertainty, Hammerson forecasts that, in the most severe scenario, net rental income could fall 40pc lower across the group than 2019 figures next year. This decline was attributed to lower rent collections, weaker letting performance or rent concessions as a result of a downturn or enforced store closures .

“Footfall, sales, occupancy and collections are recovering and now close to 2019 levels. We saw a good leasing performance now ahead of previous passing rent and marginally ahead of ERV. We have strengthened our tenant profile, we have a strong and diversified leasing pipeline for the second half, and robust occupancy levels across our destinations,” said chief executive Rita-Rose Gagné.

“We are conscious of the potentially volatile environment ahead and remain focused on delivering our strategy.”

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