mark bourgeois the challenge of change · 2018-10-12 · uk shopping centres -£3.5bn france...
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Mark BourgeoisThe Challenge of Change
11 October 2018
14Countries
UK shopping centres - £3.5bn
France - £1.9bn
Ireland - £1.0bn
UK retail parks - £1.1bn
Premium Outlets - £2.4bn
Development & UK other - £0.7bn
£10.6 billion leading pan-European retail platform
2
33%
18%9%
10%
23%
7%
44%non-UK assets
440mvisitors
4,900Tenants
11 - UK shopping centres
8 - France shopping centres
3 - Ireland shopping centres
15 - UK retail parks
20 - Premium Outlets
Position as at 30 June 2018
57European shopping destinations
Top 3Market position in all chosen sectors
2.3msq m retail space
Hammerson
Hammerson – Our story
3
Westquay, Southampton Mallorca Fashion Outlet
Convenience Experience Luxury
Elliott’s Field, Rugby
Agenda to boost returns
4
Optimised portfolio
Operational excellence
Capital efficiency
3
Higher growthProactive ahead of the market & reduce costs
Reprioritise investments
Accelerate disposals: £1.1bn over two years
Increased geographical diversification
2
1Focus on flagship retail destinations and Premium Outlets
Exit retail parks
4
5 Step change retailer line-up
6
Reduce costs by at least £7m p.a. 7Progress
City Quarters concept
Devoting more resource to experience-enhancing events and digital
8
9
10
Implement £300m share buyback
Deleverage to mid-30s% LTV
Defer Brent Cross development
5
Batavia Stad, AmsterdamCabot Circus, Bristol
Hammerson - The reshaped strategyFlagship retail destinations and premium outlets
6
The Orchard Centre, Didcot Elliott’s Field, Rugby
Hammerson - The reshaped strategyExit retail parks
71 Source: Oxford Economics2 Source: International Labour Organisation 3 Source: GlobalData (Verdict)4 Source: Oxford Economics (rate of increase in spend on leisure relative to total consumer spend)5 Source: Centre for Retail Research (as at June 2018); proforma annual run-rate indicated
Economy Consumer Retail
Disruption over Brexit and economic uncertainty
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6
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f
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f
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24
f
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26
f
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28
f
UK GDP growth, historic and forecast (%) (1)
Low unemployment and falling inflation still supportive
Consumer confidence in line with long run average
Cost pressures currently heightened
Record levels of consumer debt
(40)
(30)
(20)
(10)
0
10
Jan-
12
Jun-
12
Nov-
12
Apr-1
3
Sep
-13
Feb-1
4
Jul-1
4
Dec
-14
May-
15
Oct
-15
Mar-1
6
Aug
-16
Jan-
17
Jun-
17
Nov-
17
Apr-1
8
GFK consumer confidence index National living wage
Business rates
Currency movements
0
2
4
6
8
10
2012Q1
2013Q1
2014Q1
2015Q1
2016Q1
2017Q1
2018Q1
UK unemployment rate (%) (2)
Shifting spending patterns
Online penetration(3)
17%
Growing spend on leisure (4)
+30%
Increased store closures and CVAs
0
1,000
2,000
3,000
4,000
2010 2011 2012 2013 2014 2015 2016 2017 2018(YTD)
UK retailer administrations (number of stores)(5)
Unusually turbulent period in UK retailMarket backdrop
8
Strong venues continue to prosperFlight to quality from both shoppers and brands
The Orchard Centre, Didcot Highcross, Leicester
9
Athleisure and well-being
Exceptional dining experiences
Convenient services
Personal luxuries
Well curated fashion
Cars presented stylishly
International (non-US)
Brands communicating direct to consumers
Continued appetite for physical spaceSelected categories expand to drive growth
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Cha
nge
in s
hare
of le
asi
ng,
by
ERV
(2015 -1
7)
Hammerson instore sales growth, 2017 (%)
Consumer brands
Ath-leisure
Gifts
Convenient services
Leisure
Personal luxuries
Aspirational homeware
Fast fashion
Aspirational fashion
Menswear
HouseholdCasual dining
FootwearCosmetics
Jewellers
High street fashion
Lingerie
ConfectionaryCafeToys Hairdresser
Stationer Accessories Books
Takeaway food
Travel agentHealth foodsDept
store
10(1) Includes leases signed across all Hammerson UK shopping centres 2015 – 2017, measuring change in proportion of new leasing signed; Hammerson same-centre instore sales YoY
Hammerson UK shopping centre leasing growth and instore sales growth(1)
Our insightConsumer trends driving our leasing strategy
11(1) ‘Apparel’ includes clothing, footwear and lingerie
UK shopping centre leasing (£m) (1)
Apparel is lower as a proportion of total leasing
New brands are replacing old: Evolving consumer preferences inform our leasing strategy
39%
33%
0%
20%
40%
60%
80%
100%
2015 2017
Apparel
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
High-street and fast-fashion Athleisure Aspirational fashion
2015 2017Example tenants
UK shopping centre apparel leasing (£m)
Ath-leisure High street fashion
Apparel is a dynamic categoryTilting our mix towards winning brands
12
2003 Bullring, Birmingham
Bullring 15 years onVenues which thrive need constant change
20180 Bullring & Grand Central Birmingham
Doubling of restaurants, aspirational fashion & consumer brands
13
SKATE, Westquay
Footfall +10%
46,000 visitors
Social media reach of 733,000 people
Garden of Pure Imagination, Dundrum
Footfall +8%
Wimbledon screens at the Esplanade, Westquay
Footfall +3.5%
Social media reach of 270,000
Viva Las Riverside, Oracle
Footfall +14%
22,500 visitors
Social media reach of 340,000
Animating places through eventsFocusing on experience with a dynamic programme of events
14
Enhancing the customer experience through innovationDigital driving experience
Style Seeker
Voicebot, Bullring
Frictionless parking,Dundrum
15
Iconic venuesThrilling customers with exceptional design
Westquay, Southampton
Victoria, Leeds Cabot Circus, Bristol
Questions
16
Cabot Circus, Bristol
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