February 21, 2011 / 7:45 AM / 6 years ago

UPDATE 2-Hammerson eyes new buys as full-year NAV rise

* Adjusted NAV/shr 4.95 pounds, up 17.6 pct on year

* Total dividend per share 15.95 pence, up 3.2 percent

* Occupancy at end-Dec 97.3 pct, against 95.4 pct year ago

* Sees continued shift to prime from secondary assets

* Shares up 1.8 percent to 455.3 pence

(Adds share reaction, analyst quote, conference call)

By Daryl Loo

LONDON, Feb 21 (Reuters) - Anglo-French mall owner Hammerson (HMSO.L) posted a 17.6 percent rise in full-year net asset value, lifted mainly by a spike in its UK properties values, and said it remained on the lookout for new buys and developments.

The FTSE 100-listed landlord said on Monday the value of its 5.3 billion pounds ($8.6 billion) UK and French portfolios rose, respectively, 12.5 and 1.9 percent in 2010, lifting its adjusted NAV a share to 495 pence at end-December 2010, from 421 pence a year ago. "We expect a positive share price reaction today and remain 'overweight', given the continued strong demand for prime assets and its modest loan-to-value ratio of 32 percent," JPMorgan analyst Harm Meijer said in a note.

At 0930 GMT, Hammerson shares were up 1.8 percent to 455.3 pence, outshining a 0.1 percent fall in the broader UK property stocks index .FTELUK.

Chief executive David Atkins said he expected Hammerson's prime UK malls to be insulated from the effects of public spending cuts, despite concerns that government austerity will hit the commercial property market this year. [ID:nLDE70K142]

"Even if there were a reduction overall in retail spending ... what we're seeing in our portfolio is an increase in market share of spending, and I see that trend continuing in the next 12 months," Atkins told a conference call.

PRIME FOCUS

Hammerson said its net debt at the year-end was 1.8 billion pounds, while liquidity, cash and undrawn facilities totalled 1.0 billion pounds. The company said it would target prime UK and French retail, and London offices for acquisitions.

"In the last 12 months we found good opportunities in each of those sectors, and I would expect us to follow the same sort of pattern in the coming 12 months," Atkins said, adding more of these opportunities will come from bank asset sales.

Hammerson, which saw its occupancy rise to 97.3 percent from 95.4 percent a year ago, said factors such as the weakness of sterling and rising commodity costs had affected UK retailer profitability in the wider market.

This is expected to cause a continued shift in retailer and investor focus away from secondary assets to its prime, regionally dominant malls and conveniently located retail parks, where occupancies and rental values have held up, it said.

The company said disposals in 2010 helped raised 555 million pounds, of which 219 million was invested in acquisitions.

It proposed a full-year dividend of 15.95 pence a share, up 3.2 percent year on year. (Reporting by Daryl Loo, editing by Sinead Cruise) ($1=.6152 Pound) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)

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