UK shopping centre landlord Hammerson plc (LON:HMSO) reported a 6% increase in first half profits as it shrugged off a challenging retail sector to achieve record leasing activity.
Adjusted profit came to £119.4mln in the six months to 30 June, compared to £112.6mln the previous year.
The group’s European Public Real Estate Association, or EPRA, net asset value per share edged up 4.2% to £7.71 from £7.39 as more customers visited its shopping centres.
UK retailers have been hit by a slowdown in consumer spending due to the impact of rising inflation. Retailers are also experiencing cost pressures from a weaker pound, changes to business rates and higher minimum wages.
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Next plc (LON:NXT) issued a profit warning earlier this year while Marks & Spencer plc (LON:MKS) posted a slump in full year profits.
Hammerson, however, attracted new tenants to its prime locations with leasing volumes up 44%, amounting to 228 deals worth £18.1mln. Rents were 8% ahead of estimated values and rental income increased 9.7% to £184mln.
The group raised its interim dividend 5.9% to 10.7p.
Chief executive David Atkins said: “This performance is particularly pleasing in the context of a more uncertain political and economic backdrop and structural shifts in the retail sector.”
Hammerson was cautious on the outlook, nevertheless, noting the uncertainty around Brexit and falling consumer confidence. Immediately after the UK voted to leave the European Union last June, shares in property developers took a beating. However, the market has since recovered on strong investment from overseas buyers, who have been attracted by the weaker pound.
Shares in Hammerson rose 0.06% to 584.25p.