Hammerson pre-tax profit more than doubled last year due to revaluation gains
The figures
Profit before tax at the property firm more than doubled from £341.2m a year earlier to £703.1m for the year ended 31 December 2014. Net asset value – an important indicator for developers which measures the value of the buildings they own – jumped 11.3 per cent to £6.38m. Net rental income – comprised of income from rents, car parks and commercial sales – rose 8.1 per cent to £305.6m from £282.8m a year earlier.
Why it's interesting
Hammerson, whose shopping centres include Brent Cross in north London and the Bullring in Birmingham, benefitted from positive shifts in consumer sentiment encouraging retailers to expand operations. This was down to a brighter economic backdrop, low inflation and low interest rates encouraging high street spending. Pre-tax profit was driven by revaluation gains from its property portfolio as well as its operational performance.
What Hammerson said
"2014 has seen an increase in investor demand for real estate, reinforced by an appetite from overseas investors for relatively safe returns from prime assets in the UK and France. This is further encouraged by the continuing low interest rate and inflation environment," Hammerson said.
"These factors have contributed to a rise in real estate values during 2014 and this trend is forecast to continue into 2015."
"However, in the event that there is further instability in the eurozone, significant volatility could return to financial markets in the short to medium terms, which could have a negative effect on real estate values."