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Hammerson's Share Price Could Benefit as We Still Shop Till We Drop

By Malcolm Stacey | Wednesday 8 November 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello, Share Throwers. They tell me that shopping centres are not in favour as much as they used to be. Perhaps it’s because we’re beginning to adopt the irritating American habit of calling them malls. But it’s more likely to be the advance of internet selling. However, the public will never abandon the strong British pastime of real shopping. And so I believe the present level of popularity will hold fast and may even improve. And it will if we ever, as a society, find ourselves with more leisure time. Technology hasn’t done the trick so far, but it might do.

Hammerson (HMSO) is a £4 billion Footsie company with some great shopping locations, including the famous Bullring in Birmingham and Brent Cross in London. Yet its share price has underperformed the Footsie by falling off this year.

It’s achieving a record number of leases - 228 - over a million square feet of shop space. And of great interest to you, I’m sure, is that the dividend yield could be between 6% and 8% in 2018. Yes, 8%.

Apparently, many top names in the shopping world are looking for bigger venues for their stores. Hammerson should be able to supply those larger premises. And if you don’t think real shopping has as rosy a future as I do, you may be encouraged by the fact that Hammerson is more than happy to take other tenants. Cinemas and restaurants, for example. And both these sectors are doing rather well these days. It’s been dealing with its debt, too, by pruning its interest payments and restructuring its loans from banks.

Hammerson also has a presence in Ireland and France. That could protect it somewhat against worries about Brexit - which I happen not to share. A bigger concern might be drops in consumer demand. But recent figures don’t show as big a cut-back on popular spending as the City had feared.

And now the Punter’s Return is open.

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