Hammerson, one of Britain’s biggest shopping centre owners, was paid only about a third of the quarterly rent it was due last week as cash-strapped retailers struggled to survive the coronavirus crisis.
The company, which owns the Bullring in Birmingham and Brent Cross in London, said it had been deluged with requests for rent deferrals, cuts or waivers as the majority of retailers have been forced to close their shops as part of the Covid-19 lockdown.
Hammerson, which also has a stake in the Oxfordshire designer discount outlet Bicester Village, said it had received 37% of UK rent billed for the second quarter. Taking into account rent deferrals and moves to monthly payments, which Hammerson has offered to some tenants, it has received 57% of rent due.
Two of Hammerson’s flagship centres, Victoria in Leeds and Highcross in Leicester, are fully closed, while 30 essential stores – such as food stores and pharmacies – remain open across other malls, which account for 4% of rent.
The firm said it believed it should support its tenants, in particular smaller and independent brands that have been hit hard by the closure of its malls, and that it would review requests for rent deferrals, moves to monthly payments and waivers on a case-by-case basis.
The fashion chain Primark and the fast food chain Burger King are among Hammerson tenants that failed to pay their second-quarter rent last week. The restaurant chain Carluccio’s, which on Monday collapsed into administration, had written to its landlords to seek rent cuts or deferrals, and Yo! Sushi was also unable to pay its rent.
The Swedish fashion chain H&M, another Hammerson tenant, has asked its landlords to give it the right to exit leases with one month’s notice if sales do not recover after the pandemic.
Fellow shopping centre firm Intu, which owns the Trafford Centre in Manchester and Lakeside in Essex, said last week it had received 29% of rent due. It is fighting for survival as the low rent take puts it on course to breach the terms on its debt commitments, unless its lenders show some leniency.
Hammerson, which scrapped its dividend to conserve cash, said it had access to just over £1bn of borrowing facilities and cash, and would receive £395m from the sale of seven retail parks at the end of April.
The UK retail industry was already under pressure from weak consumer confidence, a shift to online shopping and rising costs. The trend had hit Hammerson hard and forced it to write down its property portfolio by £828m last year. It has sold its out-of-town retail parks to focus on its flagship malls.