The group's property portfolio was valued at euro 5.9 billion ($7.2 billion), and adjusted net-asset value per share at the end of June was up 5.1% to 844 pence from 803 pence a year earlier. The vacancy rate within Hammerson's portfolio fell from 9.2% in December to 8.1% in June.
Hammerson says that, although UK retail property rental values are expected to continue to show strong growth, the rate of that growth is expected to slow. "Investor sentiment toward the retail sector remained positive, leading to a further increase in values," says chairman Ron Spinney. "Some slowdown in the rate of retail-sales growth may occur in the second half of 2004 and in 2005. Nevertheless, rental values of prime retail assets are expected to show continuing growth."
In France, there has been an increase in inquiries from retailers for space in the group's centers and that is supporting current rental levels. "Investment demand remains strong," Spinney says. "However, with existing investors reluctant to dispose of major shopping centers, there have been few transactions."
In Germany, rents and values for retail properties have weakened. "Although there are signs of economic recovery, the German retail property market is likely to remain difficult," the chairman predicts.
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