2019 full-year results 25 February 2020 · 2020-06-10 · 5 Loan excludes premium outlets net debt...

2019 full-year results

25 February 2020

Village Noël, Les Terrasses du Port, Marseille

Agenda

01 2019 full-year overview

02 2019 full-year financial results

03 Strategic and operational review

04 Conclusion

Additional disclosure

2

Westquay, Southampton

Freeport Lisboa, LisbonSummer fest, Dundrum, Dublin

Les Terrasses du Port, Marseille

Delivering strategic progress in a challenging environment

31 Reflects net proceeds of £428m from disposal announced on 21 February 2020 of seven retail park portfolio and Abbey Retail Park, Belfast

Debt reduction target surpassed, retail parks exited Gross proceeds of £975m since January 2019

12 Retail Parks and 75% of Italie Deux

Pro forma(1) net debt at £2.4bn (vs target 2019 <£3bn), Gearing 55%, LTV 35%, LTV 42% fully proportionally consolidated

Earnings reducing due to disposalsEPS 28.0p (-8.5%), DPS 25.9p (no change)

FY20 dividend to be rebased to 14.0p

Decline in flagship valuations; premium outlets growthGroup capital return -9.8%, flagships -14.8%, premium outlets +8.2%

NAVPS 601p (-18.6%)

Diverse portfolio dilutes UK income weaknessGroup LfL NRI +0.5%, UK flagships –6.7%, premium outlets +10.8%

Weak UK leasing metrics, stronger in France and Ireland

Proactive management vital in polarising market100% of new UK flagship leasing to target categories

Repurposing department stores in Dundrum and The Oracle

Footfall up in all regions, outperforming benchmarks

Full-year overview

4

Hammerson annual disposal proceeds (£m)

1 Key disposals: Italie Deux (75%), Dallow Road, Abbotsinch, St Oswald’s and Parc Tawe 2 Eight retail parks: Abbey, Central, Cleveland, Cyfarthfa, Elliott’s Field, Telford Forge, Ravenhead and The Orchard Centre

£1bn transacted in the last 12 monthsFull-year financial results

0

100

200

300

400

500

600

700

2015 2016 2017 2018 2019 2020 YTD

UK flagships UK retail parks UK other France Ireland

(1) (2)

See slide 69

51 UK Flagships, FY19 only

Delivering against strategy in polarising retail marketFull-year overview

July 2018Strategic Agenda Progress to date

• Delever to mid 30%s LTV

• £300m share buybacks

• Defer Brent Cross

• Net debt reduced by a third to £2.4bn

• Buybacks programme ended July 2019

• Brent Cross and Croydon on hold

• Exit Retail Parks

• £1.1bn of disposals targeted

• Focus on flagships and premium outlets

• Progress City Quarters

• Retail Parks exit achieved

• Total disposals of £1.4bn

• Portfolio - flagships now 57%, premium outlets 34%

• VIA Outlets 50/50 JV

• Planning for three City Quarters schemes

• Step change retailer line-up

• Reducing costs

• Significant repurposing underway

• 100% of new leasing to target categories(1)

• Strong leasing in France and Ireland

• £7m annualised cost savings

Operational Excellence

Optimised Portfolio

Capital Efficiency

6

Priorities remain: reduce debt; maintain vibrancy; City QuartersFull-year overview

Operational Excellence

Optimised Portfolio

Capital Efficiency

Key priorities

• Further cross-portfolio disposals to strengthen balance sheet

• Disciplined capital expenditure

• Cost control

• Diverse portfolio: Flagships; Premium Outlets; City Quarters

• VIA Outlets: organic growth and acquisitions

• Progress City Quarters

• Repurposing department stores

• Shift tenant line-up to target categories

• Enhance visitor experience and drive footfall

• Net Positive

Our Net Positive commitments

7

Full-year overview

Hammerson controlled impacts

Hammerson controlled & development

impacts

Hammerson, tenant

& development impacts

2016 – 2020Phase One

2021 – 2025Phase Two

2026 – 2030Phase Three

Hammerson set a target in 2015 to be Net Positive for carbon, water, resource-use and socio-economic impacts by 2030

See slides 76-78

Significant progress against ambitious targets

8

Full-year overview

1 EPRA LfL2 Service charge and car park savings from at directly managed assets at 100%3 Source: London Benchmark Group at 100%

FY19 achievements towards Net Positive

-12%carbon(1)

-12%electricity(1)

-7%water(1)

£900kenergy cost savings(2)

£1.4mcommunity investment spend(3)

Thassalia project, Les Terrasses du Port PV array, Silverburn

2019 full-yearfinancial results

Victoria Leeds, Leeds

FY headline results

10

Full-year financial results

31 December 2019 31 December 2018 Change

Income statement Net rental income (£m) 308.5 347.5 (11.2%)

Adjusted profit (£m) 214.0 240.3 (10.9%)

Adjusted EPS (p) 28.0 30.6 (8.5%)

Total dividend (p) 25.9 25.9 −

Balance sheet Portfolio value (£m)(1) 8,327 9,938 (9.8%)

EPRA NAVPS (p) 601 738 (18.6%)

Net debt (£m) 2,843 3,406 (16.5%)

Gearing 65% 63% +2pp

LTV – headline 38% 38% −

LTV – full proportionally consolidated

45% 43% +2pp

1 Figures on a proportionally consolidated basis including premium outlets and assets held for sale2 Portfolio value change reflects capital return

(2)

30.6

28.0

3.1

1.5

0.5 0.6

1.5

0.4

20.0

22.0

24.0

26.0

28.0

30.0

Dec 2018 Net disposals LfL NRI Net admin Premium outlets Interest FX, tax and other Dec 2019

11

2019 EPS walk (pence per share)

1 Other includes change in NRI due to developments (-0.3p) and impact of share buyback (+0.8p)

EPS walk – disposals remain key driver of EPS declineFull-year financial results

(1)

12

LfL NRI movements across the portfolio (%)

LfL NRI movementsFull-year financial results

1.0

10.6

-5.5

-2.6

4.2

-6.6

-0.1

11.1

1.0

-7.4

0.1

-6.8

0.5

10.8

-1.4

-5.0

2.1

-6.7

-8 -6 -4 -2 0 2 4 6 8 10 12

Group

Premium Outlets

UK Retail Parks

Ireland Flagships

France Flagships

UK Flagships

FY19

H1

H2

FY19

H1

H2

FY19

H1

H2

FY19

H1

H2

FY19

H1

H2

FY19

H1

H2

(1)

1 Value Retail 12.5%, VIA 6.2%

13

2019 FY LfL NRI analysis

1 Includes rent reviews, indexation and turnover

Flagships LfL NRI analysisFull-year financial results

-6.7%

-0.1%

-0.4%

0.2%

-1.9%

-1.6%

-2.9%

UK flagships

2.1%

-0.2%

0.0%

-0.2%

-1.3%

4.3%

-0.5%

France flagships

-5.0%

0.3%

0.0%

-1.4%

-0.5%

0.4%

-3.8%

Ireland flagships

Leasing(1)

Tenant restructuring

Surrender premiums

Void costs

Marketing

Car park, commercialisation and other

Total

See slide 54

Portfolio valuation summary

14

Full-year financial results

1 At constant exchange rates2 Figures on a proportionally consolidated basis3 Excludes impact of impairment recognised on reclassification to assets held for sale on 31 December 2019

Sector FY 2019 capital return(1)

H2 2019 capital return(1)

Value at 31 Dec 19(2)

Portfolio weighting(2)

% % £m %

Flagship destinations

UK -19.9 -11.9 2,351 28

France -10.2 -6.6 1,270 15

Ireland -7.5 -4.5 860 10

Premium outlets

Value Retail +9.5 +4.0 1,966 24

VIA +4.5 +2.1 693 8

Developments -10.7 -3.2 599 7

UK other -23.6 -13.1 135 2

UK retail parks(3) -19.5 -9.6 545 6

Total -9.8 -5.3 8,419 100

See slides64-67

15

2019 EPRA NAV movement (pence per share)

1 Includes loss on sales of properties of £92m (12p) and foreign exchange of £73m (10p)

NAVPS walkFull-year financial results

738

601

28

26 1219

26

134

500

550

600

650

700

750

800

850

Dec 2018 Adjusted profit Premium outletsreval

Retail parksimpairment

Fx & other (incl.loss on disposal)

Dividend Reval deficit(ex outlets)

Dec 2019

See slide 68

(1)

-11.3%

-7.7%

-6.7%

0.4%

-5.5%

-13.6%

-7.3%-8.1%

-2.2%

0.6%

7.8%

-2.6%

-5.9%

-1.6%-0.5%

-0.3%

-1.4%

-5.3%

-0.9%

-19.9%

-10.2%

-7.5%

8.2%

-13.4%

-19.5%

-9.8%

-22%

-17%

-12%

-7%

-2%

3%

8%

UK flagships France flagships Ireland flagships Premium outlets Developments and UKother

UK retail parks Group

Yield Income Development and other Total(4)

(2)

(3)

16

Components of capital return for FY19, total portfolio (%)(1)

Components of valuation changeFull-year financial results

1 On a proportionally consolidated basis2 Capital return of UK other -23.6%, Developments -10.7%3 Excludes impact of impairment recognised on reclassification to assets held for sale on 31 December 20194 Developments and other capital movements reflects the impact of changes in purchasers’ costs, development surpluses/(deficits) and capital expenditure

Group

17

Two year change in ERVs Dec 2017 – Dec 2019, by unit type(1) (%)

1 Unit types: Anchor >50,000 sq ft, MSU 10-50,000 sq ft, Smaller units <10,000 sq ft

• ERVs derived by external valuers to reflect leasing and market evidence

• Largest ERV declines from department store and fashion space

• UK anchor ERV: £6/sq ft

• UK MSU ERV: £24/sq ft

• French & Irish ERVs: stronger trading

ERVs reflective of underlying leasing markets since December 2017Full-year financial results

Ireland+4.3%

UK-9.8%

France -1.2%

-15%

-10%

-5%

0%

5%

10%

Anchor MSU Smallerunits

Anchor MSU Smallerunits

Anchor MSU Smallerunits

Valuation appointment tendered in 2019:

• New valuation panel includes JLL and CBRE alongside C&W

• Effective from Q2 2020

3,406

2,843

2,415

536

174

172

27 37

110

199

428

2,200

2,400

2,600

2,800

3,000

3,200

3,400

Net debt1 Jan 2019

Disposals, net ofselling costs

Net cash inflowfrom operations

Exchange andother flows

Value Retaildistribution

VIA Outlets acqnand capex

Capitalexpenditure

Dividends Net debt31 Dec 2019

Retail parkproceeds

Pro formanet debt

181 On a proportionally consolidated basis, excluding premium outlets2 Principally reflects proceeds from the sale of Italie Deux (75%), Abbotsinch RP, St Oswald’s RP, Parc Tawe and Dallow Road RP, excluding forward sale of Italik.3 Reflects net proceeds of £428m from disposal announced on 21 February 2020 of seven retail park portfolio and Abbey Retail Park, Belfast

Net debt analysis (£m)(1)

Net debt analysis Full-year financial results

(2) (3)

Credit ratios

19

Full-year financial results

1 Reflects net proceeds of £428m from disposal announced on 21 February 2020 of seven retail park portfolio and Abbey Retail Park, Belfast2 Covenant within the Group’s unsecured bank facilities, bonds and private placement senior notes3 Covenant within the Group’s unsecured private placement senior notes only4 Covenant within the Group’s unsecured bank facilities and private placement senior notes5 Loan excludes premium outlets net debt and value includes premium outlet net assets 6 Includes VIA Outlets and Value Retail net debt and property values

31 Dec 2019 (pro forma)(1)

31 Dec 2019 31 Dec 2018

Net debt £2,415m £2,843m £3,406m

Cash and undrawn facilities £1,638m £1,210m £729m

Group debtcovenants

Internal guidelines

31 Dec 2019 (pro forma)(1)

31 Dec 2019 31 Dec 2018

Gearing(2) <150%/175% <85% 55% 65% 63%

Unencumbered Asset Ratio(3) >1.50x >1.75x 2.08x 1.89x 2.13x

Interest cover(4) >1.25x >2.0x n/a 3.3x 3.4x

LTV – headline(5) no covenants <40% 35% 38% 38%

LTV – fully proportionally consolidated(6) no covenants <45% 42% 45% 43%

Net debt/EBITDA no covenants <10x 8.5x 8.9x 9.5x

See slides70-71

20

Debt maturity profile at 31 December 2019 (£m)(1)

1 Group proportionally consolidated debt, excluding premium outlets. Interest rates are on a weighted average basis, post hedging derivatives

Debt maturity profileFull-year financial results

0

100

200

300

400

500

600

700

800

900

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Revolving credit facilitiesfloating linked to IBOR

Sterling bonds 4.7% wav coupon

Private placement 2.5% wav coupon

Euro bonds 2.0% wav coupon

Secured debt 2.1% wav coupon

21

Planning for a challenging but transitional year Indicative 2020 EPS sensitivity to disposals, assuming completion at 30 June, proceeds held as cash:

FY20 modelling assumptionsFull-year financial results

FY20 NRI:

• UK negative, weaker first half

• Ireland positive

• France positive

• Premium outlets positive

Disposals:

• -2p from Italie Deux

• -5p Retail Parks

Capex: • £140m

Weighted average cost of borrowing: • 2.6% (no change)

Admin costs: • flat

Disposals (£m)

200 400 600 800 1000

Yie

ld

2% 0.3 0.5 0.8 1.0 1.3

4% 0.5 1.0 1.6 2.1 2.6

6% 0.8 1.6 2.3 3.1 3.9

8% 1.0 2.1 3.1 4.2 5.2

p (EPS)

See slides72-74

Dividend to be rebased in 2020

2019 final dividend of 14.8p (no change), full year dividend of 25.9p (no change) due to:

• Confidence in debt reduction

• REIT & SIIC tax obligations - therefore 100% PID

2020 dividend to be rebased to a sustainable level

• Board adopting prudent approach

• Meet tax obligations

Board therefore expects to recommend 2020 full year dividend of 14p

• A clear departure from recent earnings linkage

• Usual H1/H2 phasing anticipated

• Cash savings: pay down debt; invest in the business

From 2021, growth from this minimum will be dependent on:

• Further disposals

• Rental income

• Strength of balance sheet

• Capital requirements for investment in the business

• Macro-economic factors

• Health of the real estate sector

22

Full-year financial results

Strategic and operational review

Bullring and Grand Central, Birmingham

01 Diversity of portfolio

02 Flagships

03 Premium outlets

04 City Quarters

24

Pavilions, Swords

AgendaStrategic and operational review

30%

16%

11%

25%

9%

9%

25

Portfolio by value(1) FY19 operational statistics

Diverse portfolio of leading pan-European destinationsDiversity of portfolio

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

UK flagships Franceflagships

Irelandflagships

Value Retail VIA Outlets

LFL NRI Footfall Leasing vs ERV Leasing vs previous passing

Premium Outlets (34%)

Developments& UK other(2) (9%)

Flagships (57%)

France flagships

UK flagships

Ireland flagshipsVIA Outlets

Value Retail

1 On a pro forma basis, reflects net proceeds of £428m from disposal announced on 21 February 2020 of seven retail park portfolio and Abbey Retail Park, Belfast2 UK other includes Brent South retail park held for sale

See slides52-53

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UK Peer UK Peer UK Peer UK Peer HMSO Euro Peer Euro Peer

Diverse tenant base(1)

26

Diversity of portfolio

1 As at 31 December 2019, excluding Retail Parks2 Peers include: British Land, Capital & Regional, intu, Klepierre, Land Securities and URW. Data reflects most recently reported figures as at 24 February 2020. 3 Breakdown data of top 10 tenants unavailable for Klepierre and URW

Hammerson and peers(2) : % of retail rent accounted for by top 10 tenants

Hammerson

See slides60-61

(3) (3)

Flagships

Skate Southampton, Westquay

-8

-6

-4

-2

0

2

4

6

8

10

12

14

UK flagships UK Retail Parks/Other France Ireland

£m

28

Restructuring impact on rent: Dec17 – Dec19(1) (£m)

1 As at 31 December 2019. Includes all units affected by restructuring since 31 December 20172 Run rate of passing rent lost reflects difference between pre-restructuring rent and rent at 31 December 2019 from units affected 3 Analysis based on Hammerson leases impacted by CVAs between 31 December 2017 and 31 December 2019, weighted by Hammerson’s share of passing rent pre-CVA

Key flagships restructuring stats (two years to December 19):

• 234 units affected by restructuring (149 units in UK flagships)

• 9% of 2,700 units across group

• 11% of 1,400 units in UK flagships

• £14.5m run rate of group rent lost (4.5% of passing rent)(2)

• 48% of Hammerson UK flagship units subject to CVA in “no rent change” category vs 37% of market(3)

• Impacted UK flagships units: 91% trading, 70% with original occupier

Tenant restructuring: managing the challenge since December 2017Flagships

149 units

44units

38units

3units

Post restructuring passing rent + Annualised rent lost

= Pre restructuring passing rent

See slides58-59

29

Group, UK, France and Ireland flagship destinations FY19 leasing vs previous passing rent(1)

Leasing: 70% of flagship leasing at or above previous passingFlagships

1 Reflects all leasing by income

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Flagships

UK

France

Ireland

Leases below previous passing Leases in line with previous passing Leases above previous passing

Group

See slide 57

30

UK flagship destinations leasing(1) vs previous passing rent by category - FY19 (£’000s)

1 All leasing, new and renewal, excluding storage and nine reconfigurations2 Lease term < 3 years

Leasing: high street fashion remains most challenged categoryFlagships

Type £’000s No. % vsprevious passing

High street fashion 3,652 34 -36%

Non-fashion consumer brands 4,238 56 +9%

F&B 1,053 23 +8%

Aspirational fashion 1,444 18 +8%

Leisure 120 3 +118%

Total 10,507 134 -13%

-350

-300

-250

-200

-150

-100

-50

50

100

150

200

% of flexible leases in portfolio(2)

Flagships:% flexible

leasing in 2019 by passing rent by ERV

UK 23% 2.1% 9.1%

France 11% 0.9% 2.9%

Ireland 28% 2.1% 6.9%

Total 20% 1.8% 7.1%

See slide 57

Mix 2019 leasing ERV Rent

Category Current mix

by income

Current mix

by area(1)

Future mix

by area

New leasing

by area

Renewalsby area

Average across

portfolio £/sq ft

Average across

portfolio £/sq ft

Average of 2019

leasing £/sq ft

Department stores 6% 38% c.28% nil nil 6 4 n/a

High street fashion (traditional)

16% 15% c.10% Nil 58% 31 29 21

F&B 15% 9% c.12% 27% 2% 43 40 59

High street fashion (contemporary)

14% 8% c.12% nil 9% 47 46 48

Non-fashion and consumer brands

36% 17% c.20% 53% 22% 54 53 62

Leisure/events 5% 7% c.10% 1% 3% 17 16 21

Fashion (aspirational) 8% 3% c.8% 19% 6% 63 57 57

Shifting the occupier mix - UK

31

Flagships

1 Excludes 3% vacant space

DundrumIreland’s leading luxury retail

store, Brown Thomas, is to open a flagship store

>12%forecast YOC

£14mproject cost(1)

House of FraserDundrum, Dublin

13,200m2

Proactive portfolio management: repurposing department stores

32

Flagships

1 At Hammerson’s 50% ownership share

House of FraserThe Oracle Reading

13,300m2>7%forecast YOC

£13mproject cost(1)

The Oracleinnovative leisure,

F&B and flagship retail

See slide 82

-8%

-6%

-4%

-2%

0%

2%

4%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018 2019

Hammerson UK National Index

Footfall compares favourably with national indices(1)

33

Flagships

France & Ireland – tracking broadly in line with more stable markets

UK– strong polarisation

Cabot Circus Christmas lights switch on

1 Hammerson flagships footfall vs national index three month moving average. Index source: Shoppertrak (index data restated since HY19 results)

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018 2019

Hammerson France National Index

-6%

-4%

-2%

0%

2%

4%

6%

8%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018 2019

Hammerson Ireland National Index

Customer experience and innovation are driving commercial benefits

34

Flagships

Year on year footfall changes. Source: ShopperTrakSocial Media Engagement is defined in ‘Impressions’; the number of times that any content associated with the event page was displayed to a user during the reporting period. This includes both organic and paid activity. Source: Sprout Social

Super Events

Festival of Light, Dundrum

+8.7% footfall

+169% social media engagement

The Maze & Urban Treehouse, Westquay

Village Noël, Les Terrasses du Port

+2.7% footfall

+156% social media engagement

+11.1% footfall

+13% social media engagement

Customer experience and innovation are driving commercial benefits

35

FlagshipsLa

st m

ile f

ulf

ilm

ent

Fric

tio

nle

ss p

ark

ing

Fam

ily ro

om

sFle

xib

le la

bo

ur

Cheaper for online fulfilment

and returns

Physical space is key to success of retail brands

36

Flagships

Higher conversion rates than

online

Drives web traffic and

engagement

Physical retail offers competitive acquisition and distribution cost

37

Flagships

Based on fashion sector. Sources:1 Hammerson footfall by unit trial (Sept-Dec 2019 data annualised) and annual occupancy costs by unit 2 Practicology3 Hammerson exit surveys4 Practicology / IRP

Acq

uis

itio

n

Cost per visitor50p – 170p

occupancy costs(1)9p – 95p

visitor costs(2)

In-store conversion rate c.25-50%(3) c.2-4%(4)

Acquisition cost per sale(5) £1.00+ £2.25+

Op

era

tio

na

l Merchant payment cost(2) 1.2% 1.7 - 2.5%

Logistics costs(6) 2-5% 5-15%

Returns rate(6) 5-10% 15-40%

Cost per return(6) 70p – £1 £2 - £3

5 Calculation based on lower end of cost per store visitor range and higher end of in-store conversion range to create a minimum implied acquisition cost per sale

6 Accenture

The path towards stabilisation of UK rents

38

Flagships

Upward pressures on rents

Online rent increasing

Physical retail proven to drive awareness and reduce costs

Polarisation of footfall and vibrancy

Retailers making progress on right-sizing of portfolios

Increasing consumer confidence, employment, wages

Downward pressures on rents

Uncertain macroeconomic backdrop

Cyclical increase in costs

Structural pressure from online

Leasing structure

Excess retail space

Tenant restructuring

Premium outlets

Hede Fashion Outlet, Gothenburg

401 With the exception of property valuations and like-for-like net rental income growth, figures reflect overall portfolio performance, not Hammerson’s ownership share2 Premium outlets IFRS NAV as at 31 December 2019 includes liabilities in respect of distributions received in advance of £24m which will be repayable upon disposal of stakes in Value Retail

Value Retail(1)

VIA Outlets(1)

Gross Asset Value (£m) 1,966 693

Net Asset Value (£m) 1,506 445

Brand sales growth (%) 9 8

Footfall growth (%) 5 6

Average sales density growth (%)

9 2

Like-for-like NRI growth (%) 13 6

Occupancy (%) 97 93

2019 operational updatePremium outlets

Premium outlets value creation (£m)

8 year IRR - 22%

214

683

(149)

(313)

1,276

1,711

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

NAV Jan-12 Capitalinvested

Distributions -operating

Distributions -refinancing

Valuationuplift

NAV Dec-19(2)

See slides 91-97

41

2019 tax free sales (TFS) as a proportion of total sales(1)

1 Portion of total TFS as at 31 December 2019. Source: Global Blue and Premier Vision2 Including non tax-free overseas sales

Diverse customer base underpins progressive sales growth Premium outlets

9%

2%1%

Other14%

Other 2.5%

0.6%0.5%

0.4%

Domestic and

European sales

74%(2)

Value Retail: TFS customers 26% of total sales VIA Outlets: TFS customers 4% of total sales

Domestic and

European sales

96%(2)

China

S. Korea

Russia

BrazilChina

Angola

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1998 2003 2008 2013 2018

Value Retail VIA Outlets

MERs

GFC

Diverse customer base underpins progressive sales growth

42

Premium outlets

1 The sales figures have been restated at constant FX rates2 The sales figures show absolute reported sales figures, which includes acquisitions and developments

Premium outlets sales (€m)(1)(2)

SARS

Swine flu

Bird flu

City Quarters

Dublin Central

6,600residential units

Beyond retail

44

City Quarters

The Goodsyard, London

Dundrum Phase 2, Dublin Callowhill Court, Bristol

Dublin Central

9parks and public spaces

1,600hotel rooms

300,000m2work space

>100 acres of City Quarters potential

See slide 99

Next planning submission H2 2021

2019 progress

45

City Quarters

Planning committee approval

7.5 acres 1,300 residential units

130,000m2 of workspace

400 hotel rooms

Martineau Galleries, Birmingham The Podium at Dundrum, Dublin Leeds Hotel, Victoria

Planning committee approval

On-site H2 2020

107 apartments

Gym, lounge and terrace and co-working space

Planning committee approval

In discussions with major international hotel operator

205 rooms

Planned start H2 2020

Conclusion

Festival of Light, Bullring & Grand Central, Birmingham

Addressing rental decline -maintaining vibrancy, driving

footfall:

Repurposing

Shifting tenant mix

Events

Conclusion

47

Near-term will remain challenging but confident in long-term value creation

Debt reduction remains key priority

Disposals will impact earnings and dividend

First City Quarters scheme on-site in H2 2020

Strong pipeline of opportunities

Net Positive

Balance sheet strength Evolve our spaces Beyond retail

Reducing debt, repurposing and recycling capital into more diverse prime portfolio

Flagships City QuartersPremium Outlets

Questions

Highcross, Leicester

Additional disclosure

Festival of light, Westquay, Southampton

Contents

01 Group

02 Net Positive

03 UK flagship destinations

04 France flagship destinations

05 Ireland flagship destinations

06 Premium outlets

07 City Quarters

50

Group01

Bullring & Grand Central, Birmingham

Distinctive market characteristics help explain variation in performance

52

Additional disclosure: Group

1 Source: GlobalData2 Source: Oxford economics. National sales growth 2014-2019. 3 Premium outlet figure represents Value Retail sales growth due to lack of publicly available data.

UK France Ireland Premium Outlets

Macro backdrop ▲ Low unemployment and increasing wages

▼ Low consumer confidence▼ Cyclical cost pressures

▲ Stable consumer outlook▼ Occasional political unrest

▲ Strong economic growth ▼ Near-term uncertainty over

Brexit and general election

▲ Diverse exposure to highly affluent European and Global customer base

▼ Near-term risk from Coronavirus

Leasing structures ▼ Legacy of longer-terms and upward only rent reviews

▲ Indexation and three-year break clauses

► Upward only rent reviews banned for new leases

▲ Highly flexible model ► Risk-sharing from turnover

component

Geography ► High population density▼ Pure play online more

disruptive▲ High footfall in urban

locations

► Lower population density▲ Lower online penetration▲ Footfall only high in primary

urban locations

► Low population density▲ Lower online penetration▲ Dublin only urban location

of scale

▲ Located near affluent conurbations

▲ Best locations able to attract high tourist traffic

Culture ► Enthusiastic adopters of omnichannel

▼ Less leisure time▲ Increasing focus on big day

out

▲ More leisure time ▲ Daily visit to supermarket

anchor common

▲ Lack of postcodes until 2015 means greater focus on click & collect

▲ Strong growth in Global demand for luxury goods

Online penetration(1) c.17% - growth slowing c.11% c.10% 12% - very limited appetite from luxury brands for online discounting

Retail sales growth (5yr CAGR)(2)(3)

3.3% 3.1% 5.0% 8.8%

2019 UK Ireland France Retail parks

Premium outlets

Occupancy (%) 97 100 97 97 95

Leasing activity (£m) 11 2 6 3 n/a

Leasing vs. ERV (%)(1) -8 -2 +5 +1 n/a

Leasing vs. previous passing (%)(1) -11 +9 +9 -10 n/a

In-store retail sales (%)(2) -2 n/a +3 n/a +9

Footfall (%)(3) +1 +2 +2 +1 +5

Group statistics

53

Additional disclosure: Group

1 Principal leases only2 Sales: UK benchmark -2.2% (Source: Visa) premium outlets YoY. Retail sales on same-centre basis.3 Footfall: UK benchmark -4.6%, Ireland: -0.2% (source: Shoppertrak), France: +0.3% (source: CNCC), Retail parks +0.1% (source: Springboard), premium outlets YoY

2018

Occupancy (%) 98 99 97 97 94

Leasing activity (£m) 14 3 7 2 n/a

Leasing vs. ERV (%)(1) +5 +8 +5 +11 n/a

Leasing vs. previous passing (%)(1) +1 +28 +5 +19 n/a

In-store retail sales (%)(2) -3 n/a +2 n/a +8

Footfall (%)(3) -2 -2 +3 -1 +4

54

H1 2019 LfL NRI analysis

1 Includes rent reviews and indexation

H1 flagships LfL NRI analysisAdditional disclosure: Group

-6.8%

-2.1%

-0.6%

-0.2%

-1.4%

-0.6%

-1.8%

UK flagships

0.1%

-0.2%

0.1%

-0.7%

2.2%

-1.3%

France flagships

-7.4%

-1.7%

-2.1%

-0.5%

1.0%

-4.1%

Ireland flagships

Leasing(1)

Tenant restructuring

Surrender premiums

Void costs

Marketing

Car park, commercialisation and other

Total

55

2019 leasing and cumulative vs 2018(1) (£m)

2019 Group leasing performance cumulativeAdditional disclosure: Group

Flagship leasingvolumes

Dec 19£m

Dec 18£m

UK 11.2 14.4

France 6.0 7.3

Ireland 2.1 2.6

Total 19.3 24.3

0

5

10

15

20

25

30

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Janu

ary

Febru

ary

Marc

h

April

May

June

July

Aug

ust

Sep

tem

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Oct

ober

Nove

mber

Dec

ember

Monthly leasing 2019 (LHS) Cumulative leasing activity 2018 (RHS) Cumulative leasing activity 2019 (RHS)

1 Includes retail parks and other

2019 portfolio leasing key metrics

56

Additional disclosure: Group

1 Principal leases only2 Total group leasing includes UK Other £0.7m

Leasing vs previous passing (%)(1)

Leasing vs ERV (%)(1)

Like-for-like ERV growth

(%)

New rent secured from leasing

(£m)(2)

UK flagships -11.1 -8.1 -8.6 11.2

France flagships 8.3 5.0 -1.9 6.0

Ireland flagships 9.5 -1.5 1.2 2.1

UK retail parks -10.3 0.9 -6.7 2.6

Group -4.1 -2.8 -5.9 22.6

57

UK, France and Ireland flagship destinations FY19 leasing vs previous passing rent and ERV

Leasing: UK remains most challengingAdditional disclosure: Group

1 Based on passing rent, as at 31 December 20192 Excludes storage and reconfigurations

UK France Ireland

Type £’000s% vs previous

passing% vs ERV £’000s

% vs previouspassing

% vs ERV £’000s% vs previous

passing% vs ERV

Principal 6,167 -11% -4% 3,659 8% 6% 834 9% 7%

Flexible 2,441 -38% -57% 516 -70% -75% 490 23% -7%

Flexible/vacant to principal

1,899 60% -18% 422 240% -3% 419 103% -16%

Total(2) 10,507 -13% -28% 4,597 -8% -19% 1,743 27% -3%

Leasing performance varies by type

• Broad range of leasing performance in all markets

• UK suffering from lack of rental tension and highest proportion of flexible leasing

• Stronger rental tension in France and Ireland underpins ability to convert flexible/vacant units back to principal leases on attractive terms

58

Units in CVA or administration by month since January 2018

1 Passing rent of Jan 2020 tenant restructuring £0.4m

Run rate of tenant restructuring in the UK & Ireland Additional disclosure: Group

0

5

10

15

20

25

(1)

Tenant restructuring: 31 December 2017 – 31 December 2019

59

Additional disclosure: Group

1 Group passing rent £300.8m

UKflagships

France flagships

Ireland flagship

UKretail parks

UKother

Group

Number of units impacted 149 38 3 27 17 234

Passing rent pre restructuring (£m) 21.6 2.7 1.9 6.3 2.4 34.9

Current passing rent lost – 31 December 2019 (£m) 7.5 1.4 1.7 2.5 1.4 14.5

% of Group passing rent – 31 December 2019(1) 2.5% 0.5% 0.5% 0.8% 0.5% 4.8%

Top 20 tenants exposure(1)

60

Additional disclosure: Group

1 Ranked by passing rent as at 31 December 2019, excludes retail parks

RetailerRental

Exposure (£m)

% of passing

rent% of NIA

H&M 8.7 3.4% 1.8%

Inditex 8.4 3.3% 1.7%

Next 4.7 1.8% 1.9%

River Island 4.1 1.6% 1.4%

Boots 3.9 1.5% 0.7%

John Lewis PLC 3.7 1.5% 1.0%

Debenhams 3.1 1.2% 6.3%

JD Sports 3.0 1.2% 0.5%

CK Hutchison Holdings

2.9 1.1% 4.0%

Superdry 2.9 1.1% 0.5%

New Look 2.5 1.0% 0.5%

RetailerRental

Exposure (£m)

% of passing

rent% of NIA

TK Maxx 2.4 0.9% 0.9%

Printemps 2.4 0.9% 1.2%

Signet 2.3 0.9% 0.2%

SportsDirect 2.3 0.9% 3.6%

Arcadia 2.1 0.8% 0.2%

Natl Amusements 1.9 0.7% 0.4%

Mulliez 1.8 0.7% 0.8%

Watches of Switzerland

1.7 0.7% 1.2%

Apple 1.7 0.7% 0.2%

TOTAL 66 26% 29%

Only one occupier accounts for >2% of group rent from any region(1)

RetailerRental

exposure (£m)

% of passing

rent

% of NIA

H&M 5.3 2.06% 1.40%

Inditex 4.8 1.87% 1.20%

Next 3.8 1.47% 1.62%

John Lewis PLC 3.7 1.46% 6.30%

Boots 3.1 1.23% 0.88%

Debenhams 3.1 1.22% 3.97%

River Island 2.4 0.92% 0.56%

Superdry 2.1 0.82% 0.38%

JD Sports 2.1 0.80% 0.40%

CK Hutchison Holdings

2.0 0.77% 0.40%

Total 32 13% 17%

61

Additional disclosure: Group

1 As at 31 December 2019, excluding retail parks

RetailerRental

exposure (£m)

% of passing

rent

% of NIA

Printemps 2.4 0.93% 1.41%

Mulliez 1.8 0.70% 0.37%

H&M 1.7 0.67% 0.32%

Groupe Etam 1.7 0.65% 0.21%

Groupe Inditex 1.6 0.64% 0.50%

Armand Thiery 1.4 0.55% 0.20%

Vivarte 1.4 0.55% 0.19%

UGC 1.2 0.47% 0.94%

Rallye 1.0 0.41% 0.42%

Punto Fa 0.8 0.32% 0.11%

Total 15 6% 5%

RetailerRental

exposure (£m)

% of passing

rent

% of NIA

SportsDirect 2.3 0.90% 0.70%

Inditex 2.0 0.77% 0.30%

River Island 1.7 0.66% 0.18%

H&M 1.7 0.65% 0.30%

Marks & Spencer 1.2 0.45% 0.63%

Primark 0.9 0.36% 0.27%

Next 0.9 0.36% 0.26%

TK Maxx 0.8 0.32% 0.40%

RSA 0.8 0.31% 0.33%

Boots 0.8 0.30% 0.14%

Total 13 5% 4%

UK France Ireland

OCRs do not reflect store value and are not comparable between sector, peer or country

62

Additional disclosure: Group

1 Source: Eurostat2 Source: Javelin Group3 Source: Global Data

Not comparable between peers

• Hammerson OCRs only represent flagships. OCRs for retail parks and premium outlets are significantly lower

• Our peers present their OCRs as a blended average of all assets• Hammerson UK blended flagships and retail parks OCR is 17.3%

Do not reflect value • A store’s value is not only till sales, but click & collect, returns and driving online sales• OCRs ignore margin and staff costs which can vary widely by retailer

Average hides wide variance

Not comparable between countries

• Same retailer in France and the UK will have very different costs beyond occupancy e.g.hourly staff costs 30% higher in France(1), distribution costs 50% higher in France(2)

• Also rate of channel shift is very different; UK c.17% and France c.11% distorting OCRs(3)

High street fashion avg: 27%Low10%

High52%

OCRs do not reflect store value and are not comparable between sector, peer or country

63

Additional disclosure: Group

1 Source: Javelin Group

2018 2019

UK flagships

France flagships

UK flagships

France flagships

Rent: sales 13.3% 10.7% 12.7% 10.4%

OCR 22.6% 13.7% 22.2% 13.4%

OCRs remain consistent across both markets

• OCRs in UK and France not comparable due to differing costs

structures for retailers in UK and France. Higher staff and

distribution costs in France impact rental affordability

• Also rate of channel shift is very different UK c.17% and France

c.11% distorting OCRs

% Fashion sales P&L(1) UK retail French retail

Business rates 6-7% 1-2%

Staff costs 8% 15%

Distribution costs 1.5% 2%

2019 valuation data (NIY)

64

Additional disclosure: Group

UKflagships

France flagships

Ireland flagships

UK retailparks

UK other Total portfolio

NIY (%)

31 Dec 2019 5.5 4.1 4.1 7.3 7.4 5.1

30 Jun 2019 5.2 3.8 4.0 6.8 6.0 4.8

31 Dec 2018 4.8 3.7 3.9 6.0 5.7 4.6

Change 6m (pp) 0.3 0.3 0.1 0.5 1.4 0.3

Change 12m (pp) 0.7 0.4 0.2 1.3 1.7 0.5

2019 valuation data (ERV)

65

Additional disclosure: Group

UKflagships

France flagships

Ireland flagships

UK retailparks

UK other Total portfolio

ERV (£m)

31 Dec 2019 154.5 65.1 42.2 42.5 12.0 316.3

30 Jun 2019 164.0 89.9 45.3 53.9 12.9 366.0

31 Dec 2018 169.3 89.3 45.3 59.7 13.3 376.9

LfL change 6 months (%)

-6.1 -3.0 1.6 -1.3 -8.6 -3.9

LfL change 12 months (%)

-8.6 -1.9 1.2 -6.7 -11.4 -5.9

2019 valuation data (TEY)

66

Additional disclosure: Group

UKflagships

France flagships

Ireland flagships

UK retailparks

UK other Total portfolio

True equivalent yield (%)

31 Dec 2019 6.2 4.7 4.7 7.6 9.4 5.8

30 Jun 2019 5.9 4.5 4.6 7.2 8.7 5.5

31 Dec 2018 5.5 4.3 4.5 6.8 8.0 5.3

Change 6m (pp) 0.3 0.2 0.1 0.4 0.7 0.3

Change 12m (pp) 0.7 0.4 0.2 0.8 1.4 0.5

67

Historical NIYs, Hammerson flagships vs 10year gilt/bund

Widening spreads underpin institutional interest in prime assetsAdditional disclosure: Group

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19

Hammerson UK Hammerson France Hammerson Ireland 10 year gilt 10 year bund

(£ million) Old metrics Old metrics New metrics(1)

NAV NNNAV NRV NTA NTV

IFRS NAV 4,377.0 4,377.0 4,377.0 4,377.0 4,377.0

Dilutive share schemes 1.6 1.6 1.6 1.6 1.6

Diluted NAV 4,378.6 4,378.6 4,378.6 4,378.6 4,378.6

Exclude: deferred tax 270.7 270.7 270.7 270.7 −

Exclude: fair value of interest rate swaps 19.9 19.9 19.9 19.9 −

Exclude: goodwill as a result of deferred tax (70.6) (70.6) (70.6) (70.6) −

Include: property transfer taxes − − 522.2 − −

Include: fair value of currency swaps as a result of changes in interest rates

− − 17.0 17.0 −

Include: goodwill per IFRS balance sheet − − − (27.6) (98.2)

Include: fair value of borrowings − (183.3) − − (183.3)

Total 4,598.6 4,415.3 5,137.8 4,588.0 4,097.1

Per share (p) 601 577 671 599 535

Reconciliation to new EPRA measures as at 31 December 2019

68

Additional disclosure: Group

1 Unaudited

Key disposals achieved 2018 – 2020

69

Additional disclosure: Group

1 Gross proceeds 2 Total annual gross proceeds (includes ancillary disposals): 2018 - £570m , 2019 - £542m, 2020 - £433m (YTD)3 Central, Cleveland, Cyfarthfa, Elliott’s Field, Telford Forge, Ravenhead, The Orchard Centre (Didcot)

NIY(%)

Proceeds(1)

£mBuyer

2018:Battery Retail Park, Selly Oak 6.0 58 NFU Mutual

Wrekin Retail Park, Telford 7.4 35 Ediston/Europa

Imperial Retail Park, Bristol/Fife Central Retail Park, Kirkcaldy 7.4 164 Capreon (private equity)

Highcross, Leicester (50%) 5.5 236 Asian investor, introduced by M&G Real Estate

2019:Dallow Road, Luton 7.6 24 Private equity

Italie Deux, Paris (75%) 4.1 363 AXA

Abbotsinch, Paisley 7.8 67 Ashby Capital

St Oswald's Retail Park, Gloucester 8.5 54 Local authority

Parc Tawe, Swansea 4.7 22 Private investor

2020:Abbey, Belfast 8.4 33 Slate Asset Management

Portfolio of seven retail parks(3) 8.9 400 Orion European Real Estate Fund V

Total 2018 – 2020 YTD(2) 1,456

Gearing sensitivity(1)

70

Additional disclosure: Group

1 Reflects net proceeds of £428m from disposal announced on 21 February 2020 of seven retail park portfolio and Abbey Retail Park, Belfast2 Gearing sensitivity on changes in pro-forma 31 December 2019 values and future disposal proceeds3 Calculations assume disposals are achieved at 31 December 2019 book values

Disposals (£m)(3)

0 100 200 300 400 500 600 700 800 900 1000

Red

uct

ion in G

roup

va

lues(

2)

0% 55% 53% 51% 48% 46% 44% 41% 39% 37% 35% 32%

5% 61% 58% 56% 53% 51% 48% 46% 43% 41% 38% 36%

10% 67% 64% 62% 59% 56% 53% 51% 48% 45% 42% 39%

15% 76% 72% 69% 66% 63% 60% 57% 54% 51% 47% 44%

20% 86% 83% 79% 76% 72% 68% 65% 61% 58% 54% 51%

25% 100% 96% 92% 88% 84% 80% 75% 71% 67% 63% 59%

LTV methodology

71

Additional disclosure: Group

31 December 2019(pro forma)(1)

31 December 2019 31 December 2018

Net debt Headline

(£m)Fully proportionally

consolidated (£m)Headline

(£m)Fully proportionally

consolidated (£m)Headline

(£m)Fully proportionally

consolidated (£m)

Group 2,415 2,415 2,843 2,843 3,406 3,406

VIA Outlets - 238 - 238 - 242

Value Retail - 658 - 658 - 658

Loan 2,415 3,311 2,843 3,739 3,406 4,306

Property values

Group 5,245 5,245 5,668 5,668 7,480 7,480

VIA Outlets - 693 - 693 - 636

Value Retail - 1,966 - 1,966 - 1,823

VIA Outlets net assets 379 - 379 - 326 -

Value Retail net assets 1,355 - 1,355 - 1,211 -

Value 6,979 7,904 7,402 8,327 9,017 9,939

LTV 35% 42% 38% 45% 38% 43%

1 Reflects net proceeds of £428m from disposal announced on 21 February 2020 of seven retail park portfolio and Abbey Retail Park, Belfast

72

Capex 2019-2021

1 Completion of Les 3 Fontaines and Italik extensions2 Other committed caoex reflects land assembly related costs at Croydon and The Goodsyard3 Excludes amortisation of tenant incentives. 2019: -£5m

Capex and guidance Additional disclosure: Group

Committed 2019

Actual

£m

2020

Forecast

£m

2021

Forecast

£m

On-site developments(1) 58 63 35

Other committed capex(2) 7 15 15

Discretionary

Flagship destination investment 31 42 60

City Quarters 6 20 20

Total 102 140 130(3)

Examples: Income accretive: Repurposing and reconfiguration, capital contributions, digital screens

Other (partly recoverable from tenants): Wayfinding projects, WC upgrades, LED relamping, seating upgrades, family rooms, smart metering

73

Maintenance capex – FY 2019Additional disclosure: Group

Capital expenditure

Gross rental income (£m) 158 82 42 282

Capital expenditure – no additional area (£m) 10 8 1 19

Yield on cost from capital expenditure – no additional area (%) 4% 3% 1% 3%

Capital expenditure – no additional area: gross rental income (%) 7% 9% 3% 7%

Service charge (maintenance)

Examples: Painting, flooring upkeep, M&E: CCTV, wifi , IT systems maintenance

UKflagships

France flagships

Ireland flagships

Total

Service charge income (£m) 34 22 13 69

Maintenance expenditure within service charge (£m) 8 4 1 13

Examples: Income accretive: Repurposing and reconfiguration, capital contributions, digital screens

Other (partly recoverable from tenants): Wayfinding projects, WC upgrades, LED relamping, seating upgrades, family rooms, smart metering

UKflagships

France flagships

Ireland flagships

Total

Service charge income (£m) 36 25 12 73

Maintenance expenditure within service charge (£m) 7 4 2 13

74

Maintenance capex – FY 2018Additional disclosure: Group

Capital expenditure

Gross rental income (£m) 178 84 44 306

Capital expenditure – no additional area (£m) 28 25 - 53

Yield on cost from capital expenditure – no additional area (%) 8% 4% n/a 6%

Capital expenditure – no additional area: gross rental income (%) 16% 30% n/a 17%

Service charge (maintenance)

Examples: Painting, flooring upkeep, M&E: CCTV, wifi , IT systems maintenance

Net Positive02

Declutter to refresh, Cabot Circus, Bristol

761 Net Positive Phase One (2016-2020) figures are calculated for the group on proportionate ownership basis2 Offsets will be required to reach Net Positive3 Landlord only4 Net of recycling

FY20 a pivotal year for Net PositiveAdditional disclosure: Group

Net Positive carbon emissions (tonnes CO2e) 2015 baseline

2019outcome

2020Forecast

Carbontonnes CO2e

30,500 12,241 8,600

WaterM3 (3) 336,000 196,000 152,000

Resource usetonnes(4)

8,539 3,414 2,820

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2015 2016 2017 2018 2019 2020

30,500

25,400

27,500

17,900

8,600

12,200

(2)

Beehives at The Oracle rooftop, Reading

(1)

Delivering against our Positive Places Strategy

77

Our progress against 2019 plans

2019 Target Progress

Reducing energy demand across the managed retail portfolio by a further 11%

12% reduction achieved

Installing additional renewable electricity capacity at three sites 2 completed 2019, 1 completed Jan 2020

Reviewing our energy procurement model to leverage additional renewable capacity and offer grid balancing

Market review completed and new strategy in progress

Working with retailers to support efficiency improvements through fit out

Worked with 200+ retailers to improve fit out standards

Embedding Positive Places within City Quarters concept Sustainability a key USP for our City Quarters concept

Working with our design teams to deliver best in class sustainability in our Dublin developments

The Podium at Dundrum on track to achieve BREEAM Excellent and NZEB requirements

Working with regional water companies to support water reduction initiatives

Relationship with Thames Water delivering significant water savings at Oracle

Working with re-use partners to reduce waste Partnership with Globechaindelivering re-use opportunities

Continuing our programme of portfolio-wide, locally focused community engagement initiatives

Supported 400+ local community organisations

Hammerson has set a target to be Net Positive for carbon, water, resource use and socio-economic impacts by 2030

Carbon

Net Positive forcarbon meanscarbon emissionsavoided exceedemissions generated.

Resource use

Net Positive for resource use means waste avoided, recycled or re-used exceeds materials used that are neither recycled, renewable nor sent to landfill.

Water

Net Positive for water means water replenished by external projects exceeds water consumed from mains supply.

Socio-economic

Net Positive for socio-economicimpacts means making a measurable positive impact on socio-economic issues relevant to our local communities beyond a measured baseline.

“Hammerson was the first real estate company globally to set such comprehensive, challenging Net Positive targets and we are making good progress. Creating Positive Places underpins our delivery of best in class retail assets that respond to the major challenge presented by climate change.”

David Atkins, CEO

78

UK flagship destinations03

Sensory Gardens, Westquay, Southampton

2019 UK flagship leasing performance

80

Additional disclosure: UK flagship destinations

1 Principal leases only2 Excludes flexible leases (FY2018: average lease term 11 years, average incentive 7 months)

2019 UK flagship destinations leasing (£m)

UK flagship leasing key facts

Leasing vs. Dec 19 ERV -8%(1)

Leasing vs. previous passing -11%(1)

Average lease term: 8 years(2)

Average incentive: 3 months(2)

0

2

4

6

8

10

12

14

16

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Janu

ary

Febru

ary

Marc

h

April

May

June

July

Aug

ust

Sep

tem

ber

Oct

ober

Nove

mber

Dec

ember

Monthly leasing 2019 (LHS) Cumulative leasing activity 2018 (RHS)

Cumulative leasing activity 2019 (RHS)

2019 leasing £m

Principal leasing 8.1

Reconfigurations 0.6

Flexible and other 2.5

Total 11.2

2019 Sales

Hammerson -1.8%

Index -2.2%(1)

2019 Footfall Hammerson +0.6%

Index -4.6%(2)

2019 price deflation(3)

Non-food -0.9%

Clothing -8.0%

Differentiation between categories and brands in our UK portfolio

81

Additional disclosure: UK flagship destinations

1 Source: Visa F2F Index2 Source: Shoppertrak3 BRC Nielsen shop price index

Hammerson UK flagship destinations category sales and range

3.0% 2.3% 1.9% 1.9% 1.8% 1.8%

-1.0% -3.5% -5.1% -5.5% -7.6%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Jewellery &PersonalLuxuries

F&B Sportswear Dept Store -Aspirational

Fashion -Aspirational

Leisure Health &Beauty

Fashion -Modern

Home,Consumer

Brands & Gifts

Dept Store -Mainstream

Fashion -Traditional

82

Hammerson exposure to department stores in UK

Exposure to department storesAdditional disclosure: UK flagship destinations

Number of stores

Floorspace

(‘000 m2)

Hammersonsales growth

Harvey Nichols 2 8

Selfridges 1 24

John Lewis 5 114

Marks & Spencer 4 28

Fenwick 1 16

Debenhams(1) 5 74

House of Fraser(1) 3 45

Total 21 309

-ve

+ve

Highcross, Leicester

1 Includes Debenhams and House of Fraser stores at Centrale which is classified in the UK other portfolio

France flagship destinations04

Village Noël, Les Terrasses du Port, Marseille

Les Terrasses du Port Italie Deux (25%) Les 3 Fontaines Other

88%

Portfolio remains weighted towards flagship assets

84

Additional disclosure: France flagship destinations

Portfolio value: £1.4bn

Largest three assets: 88% of portfolio(1)

Focus on flagship destinations

7 France flagship destinations

1 By value at 31 December 2019 including developments

2019 leasing performance

85

Additional disclosure: France flagship destinations

1 Principal leases only2 Excludes flexible leases (FY2018: average lease term 10 years, average incentive 3 months)

2019 leasing and cumulative vs. 2018 (£m) 2019 leasing

£m

Principal leasing 4.1

Reconfigurations 1.3

Flexible and other 0.6

Total 6.0

France flagship leasing key facts

Leasing vs. Dec 19 ERV +5%(1)

Leasing vs. previous passing +8%(1)

Average lease term: 10 years(2)

Average incentive: 0 months(2)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Janu

ary

Febru

ary

Marc

h

April

May

June

July

Aug

ust

Sep

tem

ber

Oct

ober

Nove

mber

Dec

ember

Monthly leasing 2019 (LHS) Cumulative leasing activity 2018 (RHS)

Cumulative leasing activity 2019 (RHS)

2019 Sales

Hammerson +2.6%

Index +0.9%(1)

2019 Footfall

Hammerson +1.9%

Index +0.3%(1)

Differentiation between categories and brands in France

86

Additional disclosure: France flagship destinations

1 Source: CNCC

Hammerson UK flagship destinations category sales and range

7.9% 6.4% 5.5% 4.7% 4.5% 3.9% 1.2% 1.2% 0.5%

-0.5% -0.4%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Sportswear Fashion -Aspirational

Fashion -Modern

Dept Store -Mainstream

Jewellery &PersonalLuxuries

Health &Beauty

Dept Store -Aspirational

Fashion -Traditional

Leisure Home,Consumer

Brands & Gifts

F&B

Ireland flagship destinations05

The Ilac Centre, Dublin

200,000m2 of prime space plus sustainable development opportunities

88

Additional disclosure: Ireland flagship destinations

1 By value at 31 December 2019 including developments

Portfolio value: £1.0bn

Dundrum 65% of portfolio(1)

Focus on flagship destinations

Dundrum Pavilions Ilac Developments

Key retail centres map

89

Additional disclosure: Ireland flagship destinations

Premium outlets06

Mallorca Fashion Outlet, Mallorca

91

International fashion and luxury brands

Mainstream fashion brand outlets

Low-end discount outlets<€2,000

€2,000–€10,000

€30,000+

Sales densities €/m2

Tiered European outlet marketAdditional disclosure: Premium outlets

Value Retail Villages VIA Outlets centres

Bicester Village, OxfordGLA: 28,300m2

Boutiques: 161

Batavia Stad Amsterdam Fashion Outlet GLA: 31,000m2

Units: 135

La Roca Village, BarcelonaGLA: 22,800m2

Boutiques: 131

Fashion Arena Prague Outlet GLA: 25,600m2

Units: 102

Las Rozas Village, MadridGLA: 16,600m2

Boutiques: 95

Freeport Lisboa Fashion Outlet GLA: 36,600m2

Units: 132

La Vallée Village, Paris GLA: 22,400m2

Boutiques: 104

Hede Fashion Outlet, GothenburgGLA: 18,500m2

Units: 59

Maasmechelen Village, BrusselsGLA: 20,000m2

Boutiques: 102

Landquart Fashion Outlet, ZürichGLA: 21,300m2

Units: 82

Fidenza Village, MilanGLA: 21,200m2

Boutiques: 121

Mallorca Fashion OutletGLA: 32,700m2

Units: 79

Wertheim Village, FrankfurtGLA: 21,200m2

Boutiques: 116

Wroclaw Fashion Outlet, PolandGLA: 13,700m2

Units: 87

Ingolstadt Village, MunichGLA: 21,100m2

Boutiques: 112

Sevilla Fashion OutletGLA: 16,000m2

Units: 61

Kildare Village, DublinGLA: 16,700m2

Boutiques: 97

Zweibrücken Fashion Outlet, GermanyGLA: 30,100m2

Units: 118

Vila do Conde Porto Fashion OutletGLA: 27,600m2

Units: 112

Oslo Fashion OutletGLA: 13,500m2

Units: 93

Premium outlets portfolio

92

Hammerson’s total investment in Value Retail

93

Additional disclosure: Premium outlets

1 Total Village ownership calculated as economic entitlement of directly held and indirectly held interests

Holding companies 25% equity

Bicester Village

37

50

La Roca Village

29

41

Las Rozas Village

25

38

La Vallée Village

14

26

Maasmechelen Village

14

27

Fidenza Village

22

34

Wertheim Village

33

45

Ingolstadt Village

2

15

Kildare Village

29

41

Village ownership via LPs (%)

Total Village ownership (%) (1)

94

10%

7%

13%

10%8%

13%

12%11%

12%

8% 8%8%

9%

0%

2%

4%

6%

8%

10%

12%

14%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2012 2013 2014 2015 2016 2017 2018 2019

VR Sales (LHS) VIA Sales (LHS) VIA Sales Growth (RHS) VR Sales Growth (RHS)

VR and VIA Sales and Sales Growth 2012 – 2019 (€m)(1)

1 Figures have been restated at constant FX ratesSales growth include assets owned for 24 monthsSales include assets acquired from the date of acquisition

Absolute sales growth delivered through active management, acquisitions and extensions

Additional disclosure: Premium outlets

135.7

31.2

(3.3)

(16.2)

50.7

(44.4)

95.1

(40.6)

- 20 40 60 80 100 120 140

EPRA Earnings

Tax

Interest & other

EBIT

Administration costs

NRI

Property outgoings

GRI

95

£m

GRI: 62% fixed, remainder turnover; includes brand inducement amortisation

Property outgoings: includes significant marketing costs, as well as other property outgoings, e.g. leasing and car park costs, net of service charge income

Administration costs: roughly one-third local; two-thirds group

Interest & other: secured debt structure; weighted average cost of debt of 2.7%; net of participative loan earnings from investments in LP stakes in the Spanish villages

Value Retail – 2019 earnings walk (£m)

(7)

(2)

15

Tax: corporation tax ranges from 19% in the UK to 32% in France

37.4% EBIT margin

23.0% EPRA Earnings margin

1 All figures at Hammerson share

Luxury outlets incur higher costs to generate outperformanceAdditional disclosure: Premium outlets

45.6

14.6

(2.5)

(8.2)

25.3

(6.5)

31.8

(13.8)

- 5 10 15 20 25 30 35 40 45 50

EPRA Earnings

Tax

Interest

EBIT

Administration costs

NRI

Property outgoings

GRI

96

£m

GRI: 74% fixed, remainder turnover; includes car park income and inducement amortisation

Property outgoings: includes local marketing costs and leasing costs, net of service charge

Administration costs: include Value Retail advisory fees, internal staff costs and group marketing costs

Interest: secured debt structure; weighted average cost of debt of 2.4%

VIA Outlets – 2019 earnings walk (£m)

32

(7)

15

Tax: corporation tax ranges from 16% in Germany to 25% in Spain and the Netherlands

55.5% EBIT margin

32.0% EPRA Earnings margin

1 All figures at Hammerson share

Lower cost model operated below luxury end of premium outlets market

Additional disclosure: Premium outlets

Multi-phase extensions – a source of significant growth

97

Additional disclosure: Premium outlets

1 Development to be delivered in phases

Value Retail: La Roca Village, Barcelona Value Retail: Kildare Village, Dublin

Completed/Onsite Pipeline

VIA: Hede Fashion Outlet, Gothenburg

2,400m2

15 units

€10mTDC

YOC

+10%

Q4 2019

5,500m2

c.27 units

€60-65mTDC

OpeningQ2 2021

2,600m2

21 units

€50mTDC

OpeningQ4 2020

VIA – future schemes Units Launch

Sevilla Fashion Outlet 15-20 2022

Mallorca Fashion Outlet 30-35(1) 2023

Zweibrücken Fashion Outlet 30-35(1) 2024

City Quarters07

Martineau Galleries, Birmingham

The City Quarters opportunity

99

Additional disclosure: City Quarters

Key schemes AreaNext

planning submission

Start on site

Retail F&B Residential Workspace Leisure Education Culture Hotel Public spaces

Nea

r te

rm

Les 3 Fontaines, Cergy 8,400m2 n/a On site

The Podium at Dundrum, Dublin 10,000m2 n/a H2 2020

Victoria Hotel, Leeds 8,400m2 n/a H2 2020

Str

ate

gic

Victoria Phase 2, Leeds 10 acres 2020

Martineau Galleries, Birmingham 7 acres 2021

Callowhill Court, Bristol 9 acres 2021

Dublin Central 6 acres 2021

Dundrum Phase 2, Dublin 6 acres 2021

Pavilions Phase 3, Swords 18 acres 2023

Ma

jor

Brent Cross 15 acres n/a

Croydon 22 acres n/a

The Goodsyard, London 10 acres In Planning

TOTAL 103 acres