Transcript (8 segments)
H
Himanshu Raja0:06
2017 delivered a strong financial performance across all our key operating metrics. We achieved record leasing volumes, validating our ability to expertly manage our high-performing retail portfolio and create destinations which have enduring appeal. NAV per share increased 5%, boosted by the rise in portfolio valuation and highlighting further confidence in the business. The board has recommended a final dividend of 14.8 pence per share, a 6.5% uplift on 2016.
The highlight of 2017 was without question our proposed acquisition of Intu. The transaction will significantly enlarge our portfolio of leading retail assets and enhance our combined operating platform, together with providing additional opportunities to push ahead with expansion in high-growth markets. Our robust operational performance provides further evidence towards the alignment of our portfolio to retailers' growth strategies.
Our approach to leasing ensures that we attract brands most in demand from shoppers, alongside introducing new formats which excite and differentiate our destinations. In our UK shopping centres, we saw an uplift in demand from leisure operators, aspirational fashion, and major consumer brands as they seek space in our venues that drive shopper footfall. Our space is becoming increasingly desirable as a destination to showcase brands. Bullring was selected as a destination for the first UK VW experiential format store during the year. Major brands including Dyson, Nespresso, John Lewis, Smart Home, MADE.COM, and Volvo have utilized our centres for maximum effect. This continued demand for raw space from an increasingly diverse range of brands means our occupancy rate is an impressive 98.3%.
The numbers could not be more clear: we have strong demand for our space now. There are undoubtedly retailers who are facing trading challenges, but our skill is to track the brands that consumers have fallen out of love with and introduce fresh names to our lineup. This active asset management has seen new or Said's and Ernest Jones have Brent Cross replacing Jaeger, and at Westquay, Apple and Jules open new flagship stores in space previously led to Sports Direct.
In France, we saw strong letting activity at Les Terrasses du Port in Marseille. This included notable firsts for the French portfolio including Coach, Miss, Presto, and Dim. This flight to quality from retailers is also evident within our Premium Outlets platform. New brands to the Village portfolio included Tiger of Sweden, Helly Hansen, and Beyond Borg. This brand appeal shows no sign of slowing, with a consistently strong outlet sales growth of over 9%. Our unique position in high-growth Premium Outlets also increased with our latest acquisition of Value Retail stakes, taking our ownership at Bicester Village to over 50%. As retailers increasingly choose exceptional destinations to help achieve their growth, our role as an expert operator of both property and experience becomes ever more significant.
Our impressive and diverse programme of events saw an increase in the number of event days delivered in our centres of more than 50% during the year. Engaging with customers and creating a sense of theatre was fundamental to their success, which saw shopper footfall strongly outperform the benchmarks in both the UK and France. Highlights included the Festival of Light and Skate at Westquay, and the Garden of Pure Imagination at Dundrum. Our focus on digital experience also saw the launch of Style Seeker, an industry-first which uses leading-edge artificial intelligence. Style Seeker delivers an online product search tool within our physical retail environments. A significant number of brands have signed up, including Harvey Nichols, Selfridges, John Lewis, & Other Stories, and Anthropologie. Style Seeker is fully integrated into our Plus app in all of our UK centres, and we intend to expand its presence to Ireland and France during 2018.
We maintained our rigorous approach to capital recycling, which ensures we continue to improve the quality of our portfolio. We've achieved £1.2 billion of disposals over the last three years, broadly in line with book value, with over £400 million sold in 2017. This demonstrates our skill of execution and a healthy level of demand for our well-managed assets. We made further progress in reducing our weighted average cost of debt, falling to 2.9%, and LTV remained steady at 36%, comfortably within our 40% leverage policy.
The retail landscape is constantly evolving, and so is our business. This year we let more space than in any other year in Hammerson's 75-year history. However, the way tenants operate on space within our retail destinations is changing. Today, we showcase new and emerging brands whilst continuing to be the destination of choice for those which are well established. We deliver exciting events which attract consumers to our centres, and we've developed leading technology which enhances the shopping and leisure experience. We passionately believe that destination retail in the best locations will thrive in the era of bricks and clicks, and today's results are further evidence of this.