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Edited Transcript of HMSO.L earnings conference call or presentation 29-Jul-19 8:00am GMT

Half Year 2019 Hammerson PLC Earnings Call

London Aug 1, 2019 (Thomson StreetEvents) -- Edited Transcript of Hammerson PLC earnings conference call or presentation Monday, July 29, 2019 at 8:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* David John Atkins

Hammerson plc - CEO & Director

* Mark Richard Bourgeois

Hammerson plc - MD UK & Ireland

* Nicholas Timothy Drakesmith

Hammerson plc - Director

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Conference Call Participants

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* Benjamin Paul Richford

Crédit Suisse AG, Research Division - Research Analyst

* Colm Lauder

Goodbody Stockbrokers, Research Division - Real Estate Analyst

* Jonathan Sacha Kownator

Goldman Sachs Group Inc., Research Division - Financial Analyst

* Maxwell Wilson Nimmo

Kempen & Co. N.V., Research Division - Analyst

* Paul J. May

Barclays Bank PLC, Research Division - Analyst

* Robert Alan Jones

Deutsche Bank AG, Research Division - Research Analyst

* Robert Andrew Duncan

Numis Securities Limited, Research Division - Property Analyst

* Rubinder Singh Virdee

Green Street Advisors, LLC, Research Division - Analyst of Research

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Presentation

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David John Atkins, Hammerson plc - CEO & Director [1]

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All right. We'll make a start. Good morning, everyone. Thanks for coming along this morning. My name is David Atkins, and I'm Hammerson's Chief Executive. So today, I will give you my perspective on the first half; then Timon, our CFO, will drill down into the numbers. After which, I will provide you with some more detailed analysis, in particular what's happening in U.K. flagship rental income as well as reviewing our diverse portfolio. Then, of course, we'll be happy to take your questions as usual.

Now in line with the extra disclosure, we gave you the first at the full year, we have maintained that level of transparency and in many areas, we have gone even further.

So as you're aware, we are operating in a challenging environment. U.K. retail continues to grab its fair share of negative headlines. However, in spite of this, we are performing as we anticipated and delivering on our clear strategy. Our #1 priority remains to reduce debt. We said we would achieve over GBP 500 million of disposals in 2019. And even in this tough environment, we are now most of the way there.

I'm delighted to have exchanged contracts with AXA, as we announced this morning, for the sale of 75% of Italie Deux on the left bank of Paris and the forward sale of the Italik extension at a price of GBP 423 million, with a net initial yield of 4.1%. Now we are not complacent though, and we are continuing to progress disposals to further strengthen our balance sheet.

On the financials, earnings were down, largely driven by disposals, although the dividend remains unchanged. The U.K. environment remains difficult. Valuations continue to be under pressure, with a negative capital return of just over 9% in the period.

U.K. flagship like-for-like net rental income was down 6.8%, with headline leasing metrics softening due to CVAs, high street fashion renewals and a higher proportion of temporary leases. We continue to actively manage the mix in our U.K. flagships to winning categories to ensure they are destinations where people and brands want to be now and in the future.

Almost all of our new leasing was to nonfashion brands in the period, helping to drive positive footfall. Our diverse portfolio helps to offset some of the weakness in the U.K., and we saw more positive leasing trends in both France and Ireland. Our second largest group of assets, Premium Outlets, delivered another exceptional set of numbers, with double-digit growth in brand sales and like-for-like net rental income and a capital return of 4.5%. In short, we continue to manage the business hard through the headwinds and for the longer term. It's a challenging market. We are not through all of it yet. Debt reduction remains our #1 focus, and today's news is a big step forward.

Now those of you who follow us will be familiar with the 3 pillars of our strategy, which we covered in detail for the full year. We built it based on detailed market insight and in light of the structural and cyclical shifts impacting retail.

First, I'll talk about each of these 3 areas in turn. Starting with our key priority. I've already spoken about our commitment to reduce debt. With today's announcement, we are very confident of achieving our 2019 disposal target of more than GBP 500 million. This has reduced net debt on a pro forma basis to just under GBP 3.1 billion. Now this is great news and a testament to the strength of our assets. Despite the success, I must reiterate, investment markets are thin and transactions are taking longer than normal. Nonetheless, we continue to pursue additional disposals in excess of our target, where deals can be concluded on acceptable terms. This includes exiting retail parks over the medium term, and we have raised GBP 33 million in sales in this area already this year.

And the U.K. is our most challenged market. Passing rents from U.K. flagships have declined, as you can see. Ireland and France are less impacted. CVAs and administrations continue to affect us in the U.K., but we are actively managing the impact. Traditional high street fashion and department stores remain under pressure, but we are responding by repurposing space to more appealing, nonfashion and F&B brands.

Temporary leasing, those involving agreements of up to 3 years, is an increasing feature. And whilst it is a like-for-like NRI challenge in the short term, it supports cash flow, improves the mix and offers opportunities for future rental growth. What is happening to income in the U.K. is a complicated picture. I'll come back to that later to give you some more granular details on what we are seeing.

Now let me hand over, for the last time, to Timon. As you know, he will be leaving Hammerson after 8 years as our CFO. On behalf of the business and the Board, I'd like to thank him for leading our finance team and the Premium Outlets business and for his help reshaping the strategy which we're now executing. On a personal level, I'd also like to thank him for his strong support and wise counsel he's given me over the years, and I and the rest of the team wish him well. Now the search for a successor is well under way, and although he is a tough act to follow, we are very pleased of the quality of the candidates. Timon, I know there are 1 or 2 people at the rear, there are some seats at the front, if you would you like to come forward.

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Nicholas Timothy Drakesmith, Hammerson plc - Director [2]

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Well, thanks, David, and good morning, everybody. This is the final results presentation after 8 years of Hammerson. It's been a remarkable period for retail property, and we've had plenty of challenges. As you know, Hammerson is a strong business, and I'm very confident it will thrive in future.

Thanks for all your support and encouragement since 2011.

So let's have a look at these headline numbers. Starting at the top. Net rental income at GBP 156.6 million is down 12.3% on the same period last year, principally due to significant disposals as well as negative underlying like-for-like NRI movement. Adjusted profit is down 10.5% on last year due to disposals that are partly mitigated by higher profits from Premium Outlets and lower interest expenses. This translates into an earnings per share figure of 14p, a fall of 7.3% on the first half of 2018. The interim dividend of 11.1p a share is maintained at the same level as last year's. NAV per share came out at GBP 6.85, down 7.2% on December 2018, due to portfolio valuation declines of around about 10% in our U.K. portfolio. And net debt was GBP 3.4 billion at the 30th of June 2019, broadly stable compared to December 2018. This results in a headline LTV of 40% and a fully proportionally consolidated LTV of 46%.

Now this morning, we announced the major disposal of 75% of our center in Italy, and this clearly has a significant effect on net debt and credit ratios. It reduces LTV by around about 3 percentage points. So I'll talk about that in a bit more detail later as well as the rest of the results.

Now let's start with portfolio valuation, and here, we segmented the portfolio by sector. The changes in value are shown in constant currency. And the first section, as you can see, is flagship shopping centers. U.K. flagships are down 9.1% in the first 6 months, mainly due to adverse yield shift, and more on this in a second. And France portfolio is down 3.9%. Ireland's portfolio is marked down 3.2%. Premium Outlets, in contrast, had capital growth of 4.5%. Developments were down nearly 10% because of a combination of factors. And U.K. retail parks saw a capital decline of nearly 11%. So overall, the total portfolio had a negative capital return of 4.4%, reflecting weak sentiment in most of our markets.

So this bar chart shows the specific drivers of valuation movements in terms of yields in blue, income change in gray and other drivers in red. So I'm going to read across the chart from the left. The U.K. flagships has an outward yield shift over the first half, reducing values by 6.7 percentage points. ERVs are marked down around about 2%. For France, there was a slight outward yield movement as a result of the mixed sentiment and a lack of comparable transactions, until this morning, in the French retail market.

Our Dublin properties were revalued down mainly due to 10 basis points of outward yield movement in Dundrum, in part due to tenant failures. And outward yields were stable, but rental increases, again, powered values up by 4 percentage points.

The development portfolio is impacted by high yields, low rental levels and a write-down of over GBP 40 million due to the reconfiguration of our Cergy development project, west of Paris. David is going to cover this later, but we have added more leisure, added to the cost contingency and re-phased the scheme. In retail parks, there were yield increases of nearly 5 percentage points of value declines from an income reduction.

So looking at the far right, yield expansion was responsible for over 3/4 of the valuation declines, and there is further detail in the appendix.

So this page shows our steady financing position. And let's focus on the first column of numbers, which shows the pro forma position, including the 75% disposal of Italie Deux. Net debt falls to just over GBP 3 billion from GBP 3.4 billion at the end of 2018, almost at our target for the end of this year. The key leverage ratios are below our guideline limits. Gearing drops to 61% from 63% at the end of last year, headline LTV at 37% is slightly lower than 38% last year and fully proportionally consolidated LTV at 43%. Liquidity is boosted to over GBP 1.1 billion, as you can see. The pro forma net debt-to-EBITDA is 9.5x, and we want to bring down that ratio further in future.

The bottom segment of the table shows additional financing ratios, which are in line with the position at the beginning of the year. And at the time of our year-end results in February, we set a net debt target of less than GBP 3 billion, and with the planned disposals and the ones we have in motion, we aim to further strengthen Hammerson's balance sheet.

So let's move on to like-for-like net rental income, and the bars here show the changes in NRI compared to the first half of last year. And you can see that U.K. and Ireland have been significantly impacted by tenant restructuring. The first sector, U.K. flagships, tenant administrations and CVAs affect NRIs, so the sector saw a 6.8% decline. In Ireland, like-for-like NRI was badly impacted by the House of Fraser administration at Dundrum Town Centre. In France, NRI was slightly up with our Centrale Marseille generating a good performance, offset by some surrender premiums we booked in the first half of last year. For retail parks, the headline like-for-like NRI change was plus 1% due to the lease-hit Didcot. There is further information in parks in the appendix.

Outlets generated excellent uplifts of like-for-like NRI growth of more than 11%, which takes the overall picture for the group of down very slightly, 10 basis points.

Now we think it's appropriate to analyze the movements in like-for-like NRI in more detail. So this pie chart has isolated the key drivers, and we segmented flagship shopping centers in the U.K., Ireland and France. And as you might imagine, there were some common themes due to the prevailing trends in the retail industry.

Starting off in the left, in the U.K., the largest single factors are tenant restructuring, due to CVAs, void costs, and these impacted like-for-like NRI by 1.8% and 1.4% respectively. The tricky leasing environment meant that NRI was reduced by 0.6%. So these are the elements which brought down NRI by nearly 7%, as you can see.

In Ireland, the House of Fraser reorganization resulted in a 4.1% year-on-year decline in NRI. The other major factor is the significant surrender premium that was booked in the first half of 2018, which reduces 2019 NRI by 2.1%. In France, tenant restructuring was significant, although less painful than the U.K. Leasing benefited from an indexation uplift, as you know.

So in summary, the NRI performance of our flagship centers has suffered from tenant restructuring and, in many cases, challenging leasing conditions.

The next chart shows the adjusted EPS walk, which demonstrates how earnings moved for us in the first half of 2018. Reading across the chart from the left, disposals reduced EPS by 1.9p. Like-for-like NRI, excluding outlets, reduced EPS 5.8p. Administration costs were up 0.2p due to headcount restructuring charges and a reversal of the 2017 bonus accrual, which benefited first half last year. Adjusted EPS for Premium Outlets was up GBP 0.005 due to strong income growth and improved margins of Value Retail. Lower interest expense was favorable by GBP 0.01. And finally, foreign exchange and a couple of other items also improved EPS. So these items combined to produce 2019 first half EPS of 14p, 7.3% lower than last year's reported figure.

So finally, some guidance on future earnings per share trends. As previously explained, our strategy of deleveraging will dampen EPS over the next couple of years. And this is shown in the left-hand column. The significant disposal program will have a major negative effect on net rental income and, therefore, earnings. Being cautious, like-for-like NRI movement could also be negative during this time, particularly in the U.K., as the impact of tenant failure and repurposing is worked through. We expect EPS uplifts will lower interest expenses in Premium Outlets, as shown in green bars. But overall, we believe EPS is likely to be down during the deleveraging phase.

In the medium term, EPS growth is forecast to return as the more focused portfolio stabilizes NRI levels and the Cergy and Italie developments complete. Interest costs are likely to fall with lower debt levels. And we're optimistic that Premium Outlets will deliver further growth in profits.

So that's it for me. And now back to David.

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David John Atkins, Hammerson plc - CEO & Director [3]

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Thanks, Timon. Now I'd like to use much of the rest of our time to take an in-depth look at what is happening in the U.K. occupying market and how we are proactively managing through the challenges and provide some color on improving visitor demographics. After that, I will walk through the rest of the portfolio.

So you will see the metrics on this slide reflect the challenges we face. Leasing activity was lower than in the first half of 2018, although I would remind you that in itself was a record year. But we maintained a high level of occupancy as we focus on ensuring our spaces are well let and remain vibrant, supporting our cash generation.

In-store retail sales declined, although they were broadly in line with the market, whereas footfall was positive and outperformed the benchmarks.

So we're often asked what is happening to rents at our flagships in the U.K., and we want to be as transparent as possible, show you data that captures all of our leasing activity. So I'd like to start with a longer-term 18-month view, which cuts through some of the short-term noise. This slide shows the bridge for passing rent over the last 18 months. So I'll just reiterate, 18 months. You can see that almost 60% of the decline is driven by the successful 50% disposal of Highcross in 2018.

There are 3 other points to highlight. First, excluding Highcross, the decline in passing rents was 6.2% over this period. Second, that decline was driven primarily by a combination of tenant restructuring, temporary leasing and vacancy. And finally, longer-term principal leasing has been resilient, and we have been successful in focusing our leasing activity on winning categories and brands.

Now a look at how we've managed that tenant restructuring. Now this is an important and complex topic, but one that I believe we are managing well. On this cumulative chart, the blue bars show total rent from brands which have been subject to restructuring. The lower orange line, again cumulative, shows rent actually lost. I'd make 4 specific observations.

First, taking into account units impacted since the end of 2017, as of today, the total passing rent lost is 1.6% of the group total. Second, category A CVAs, that is those still paying full rent, account for almost half of Hammerson's impacted units, and that compares very favorably to an industry average of 37%. Thirdly, 3/4 of impacted units in our estate are still trading or have been relet. And finally, the 25% of units which have ceased trading undoubtedly lead to rental loss in the short term, but they also offer opportunities for improving the mix in our destinations and for future rental growth, which I will now come on to.

Now again, there's a lot of detail on this chart, which provides more disclosure on our total leasing activity in this 6 months' reporting period. Let me talk you through the 4 key takeouts. First, whilst leasing volumes have been lower during the period, our lettings have delivered a year-on-year reduction in passing rent of just 1%. And I think that's a really good result in the current environment. Secondly, looking at the table on the right, and surprisingly, perhaps, you can see that leasing to high street fashion brands involved a rent reduction of 25%. And these have been highlighted in red to the left of the bar chart. Thirdly, these high street fashion brand deals are in the main temporary leases. And finally, you can see that leasing to target categories, those are consumer brands, aspirational fashion and F&B, is driving rental growth of between 13% and 32%, as shown to the right of the bar chart.

Interestingly, many of the best new principal leases have resulted from converting successful temporary lettings, where we can trial new brands and concepts. And more on this in a couple of slides, with additional disclosure in the appendix.

Now here, we take a category level view of our proactive leasing strategy, building on the version that we showed you at the full year. To interpret the slide, look at the intended movement from current to future mix and then read across for the new leasing column. You will see that we are driving the shift in our portfolio. Our new leasing is to target winning categories. Now we absolutely acknowledge that high street fashion and department stores are seeing declines in rental income. There's no doubt about that. But through active management, focused on the right categories and brands, we are maintaining good rental price tension elsewhere.

Now a quick word on department stores. You will recall our plans to repurpose space freed up by retail restructuring in this sector. We're making very good progress on delivery, with key deals under negotiation, and we expect to be able to give you more color and news on this area in the near future.

Now here are a few examples of what that shift in mix looks like. The White Company, an aspirational brand which opened a pop-up in WestQuay in October '18, was so pleased with the response that they've now taken a permanent lease. LEGO, the most valuable toy brand in the world, is opening just 2 stores in the U.K. this year, and they are both in Hammerson centers, the Bullring and WestQuay. And even 12 months ago, who would have thought that a rejuvenated Waterstones would be taking additional space. We also continue to introduce independent, innovative F&B brands and experiences on principal leases like Stack & Still in Silverburn, for high-end pancakes, or Tandem, celebrity chef Cyrus Todiwala's Indian fine-dining concept in Highcross Leicester.

Temporary leases allow us to experiment with some exciting brands and concepts to see how they perform, and I can definitely recommend the Kitty Café in Bullring, if you want a bit of destressing with some feline friends, and for the mammals in the room, Rapha, at Victoria Leeds. So this more agile approach to letting helps maintain the vibrant mix in our centers as well as providing additional cash flow and mitigating void costs.

And our consumers are also changing. We punch above our weight in the younger demographics. That's right, it turns out young people like to shop in real life, not just online. Intuitively, you can appreciate that the shift in our occupier mix, having more space for experiences and more of the right kind of F&B, is how we will continue to grow destination shopping and enable the right brands to capture more value. As you can see from the chart, dwell time, party size and drive time are all growing as well as our key F&B metrics.

Our shift in consumer demographics plays into the footfall chart at the top of this slide. We've beaten the benchmark for 16 straight months now, and that polarization seems to be widening. And our enhanced super events created buzz at our venues. We like these initiatives as do our tenants and their customers. Using advanced digital research techniques, we know that footfall increases. The catchment area is wider, and we attract a significant number of new visitors.

Now we know that fiscal retail adds value beyond in-store sales. And here's some clear evidence for you. Using commission data, we're able to see that online traffic from local postcodes increases following a store opening. For fashion, web traffic typically increases by 20% to 30%. While it's higher for more advice-led and service-led offers, like health and beauty, we see a 60% to 90% uplift in web traffic.

Then on the right, we analyze consumers' credit card spending on fashion. This shows that when a consumer spends money in-store at a center like Cabot Circus, she then spends the same amount again online with those same brands within the next 90 days. Physical stores allow brands to showcase their products to the millions of consumers that pass through our U.K. flagship destinations, 180 million in the last 12 months, 19 million in the case of Cabot Circus. Assigning full value is not straightforward, I grant you that, but the core metrics we have traditionally used are no longer fully reflective of the true value of our physical space.

So now to our Premium Outlets. Now many of you were with us recently at the Capital Markets Day in Lisbon, where you got to see firsthand the continued strength in our Premium Outlets business. The half year numbers here underscore that. Premium Outlet investments continue to be very successful, with impressive growth in brand sales, footfall, sales density and NRI. All the metrics are moving in the right direction. And as Timon showed earlier, our share of GAV during the half increased by 4.4% to GBP 2.6 billion, and that now represents 27% of our total group GAV, just 1 percentage point behind U.K. flagships.

The differentiation of the outlet channel and global tourism trends have continued to support the performance of our centers. Now the sales growth is much higher than for the overall businesses of key brands like Polo, Hugo Boss and Nike. Tourism has also seen a really positive start to 2019, with factory sales up 14% year-on-year, driven by territories like South Korea, India and the Gulf.

So turning to France. Operational performance here remains positive. Occupancy is strong, as is footfall. We've showed marginally -- it slowed marginally as a result of the gilets jaunes protests, mostly at the beginning of the year. However, we still outperformed the benchmark. We also enjoyed another period of good leasing performance to desirable brands, including Daniel Wellington, LEGO and Levi's.

Workers continued on our major extension of Les 3 Fontaines, Cergy, with a new food hall opening spring 2020 already fully let. Earlier this year, we revised the scheme to ensure that it meets future consumer requirements, reducing fashion, having F&B and more leisure, including utilizing the existing roof terraces. To incorporate these changes, the main extension opens in mid-2021 and will now be followed by the final leisure phase, which is expected to open in 2023. The project will extend the entire trading space to over 100,000 square meters, creating one of the leading flagship destinations in the Paris region. Leasing is going well, and the project is currently forecast to achieve a yield on cost of 5%. And we expect profit recognition to improve as the scheme is progressed and leased up.

Now moving to Ireland. Occupancy remained strong and is the highest in the portfolio. Footfall was up, and leasing was on a par with the first half of last year. We saw new local brands, Mad Egg and ELY in Dundrum and F&B expansion in Swords Pavilions with Five Guys and Zaytoon. We also saw leading Irish retailers, like Dunnes, investing in their stores in the Ilac Centre and Swords Pavilions.

In the near term, we are on site adding further high-quality, differentiated local F&B and leisure to Dundrum through the Pembroke Square extension and the reconfiguration of the former Hamleys unit. As you can see, both offer attractive yield on cost. Consistent with our City Quarters strategy, there is significant PRS potential in Dundrum, starting with Building 5, where we anticipate gaining planning consent later this year and then following this up with a further Phase II development. There is more opportunity around Swords Pavilions in the north and at Dublin Central, the historic district between O'Connell Street and Henry Street. We are also advancing our plans for the repurposing of the department store space in Dundrum, which will drive an uplift in future income, although this did impact NRI in the first half, as explained by Timon.

Now I want to remind you of our market-leading sustainability credentials. We, as a reminder, were the first listed property company globally to introduce a net positive target, and we're proud that many of our peers who have since followed suit. We believe that our tenants and their customers increasingly see this as a must-do, not a nice-to-have. And we continue to reduce our impact in 2019, making progress towards our target to be net positive for carbon, resource use, water and waste by 2030.

And here is a reminder of the potential for City Quarters as we see it today, which many of you will be familiar with from our conversations in recent months. We can use the 100 acres of land we have around our flagship destinations to move beyond retail and create vibrant, attractive neighborhoods. Over the longer term, we see the business moving from pure retail to retail and beyond. It's not an add-on; it's a fundamental shift in our thinking about the way we manage our spaces and what we will become. This approach is absolutely core to the future direction and success of our business. It's about being smart and looking at our land bank holistically, recycling capital from disposals and working with partners to create value and amazing places that address how people want to live.

Now to give you a flavor, I'd highlight Martineau Galleries in Birmingham, where we submitted a master plan, including up to 1,300 homes, 100,000 square meters of office and workspace, new shops, F&B, a new hotel and public places. And last week, we also submitted a revised application to create a new mixed-use neighborhood in Shoreditch, London.

So to summarize. We said we would build balance sheet strength, pay down debt this year and we have. But we will continue to do more. We said we would focus on actively managing the mix for winning categories, and we are. Almost all of our new U.K. flagship leasing is to nonfashion brands and on attractive rents. We said we were confident that the quality and differentiation of our flagship assets would drive sustained footfall outperformance, and they are. In other words, we're succeeding in creating thriving destinations where brands and people want to be. We said that we were certain that our flagship physical retail assets were integral to an omnichannel future, and we have started to find new metrics to make this tangible for you. We said that we benefit from a diverse portfolio, and you can see that benefit in the excellent performance of our Premium Outlets and the stability provided by France and Ireland. And we said we would break down the walls of our flagship destinations, turning them into City Quarters that are thriving neighborhoods, and we are progressing this with vigor. Things are not easy, and they will not get easier soon. But in that context, we think about the long term, but we're certainly not complacent about the present. We continue to manage the business hard, facing up to the realities of the current environment. And most importantly, we're delivering on what we say.

Thank you. And we'll now go to your questions.

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Questions and Answers

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Robert Alan Jones, Deutsche Bank AG, Research Division - Research Analyst [1]

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This is Rob Jones from Deutsche Bank. 3 questions. Firstly, on Slide 15, when you talk about the guidance on EPS trends throughout the debt reduction phase in 2019, 2020, given some of these negative trends, are you still as confident as you were this time at the full year results on your ability to maintain the dividend throughout that debt reduction phase? Second, on disposals, you talked at the full year results as well about a figure of EUR 900 million of ongoing potential disposal discussions. Firstly, was Italie Deux a part of that figure? And secondly, could you give an equivalent figure as at today? And are you still or indeed more confident than you were 6 months ago your ability to achieve the in excess of GBP 100 million target?

And then thirdly, on temporary leases. I was slightly surprised to see that the temporary leases obviously have ticked up quite a bit since the -- since 2018. It's obviously 25% in the first half. I think it was 14% for 2018. Is that percentage going to continue to increase because, obviously, it's a notable that -- I appreciate they're temp leases -- but it was 26% below previous passing rent, 55% below December '18 ERVs.

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David John Atkins, Hammerson plc - CEO & Director [2]

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Okay. Thanks, Rob. If you want to cover the guidance, Timon, and I'll...

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Nicholas Timothy Drakesmith, Hammerson plc - Director [3]

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So on Page 15, and this layout of the main trends as we see them in terms of earnings per share is the same as it was in February. So the chart is the same, the forces of work are the same. The Board has declared a stable dividend, interim dividend year-on-year, and that's in line with the guidance, as you previously pointed out. So, so far, everything is in the same position as it was in February. I don't think it's right for us today to predict dividends in future. I think we have to look at the reporting cycles as they unfold. And the Board, I'm sure, will look at the circumstances and the outlook at the time. So I think the message is we're in line with what we said earlier on. We'll have to see how things unfold in future.

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David John Atkins, Hammerson plc - CEO & Director [4]

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Okay. And the disposals question, Rob. Yes, Italie Deux was included in the numbers we gave for the full year. In terms of going forwards, we remain confident around our rate of disposals. We're certainly confident around anything in excess of GBP 500 million this year. I don't want to put a specific number on other discussions, but it's not changed dramatically from where we were previously in terms of the content. So a high degree of confidence over the next 6 to 12 months about the run rate of disposals. And the temporary leases, maybe, Mark, it's a U.K. phenomenon, do you want to cover that?

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Mark Richard Bourgeois, Hammerson plc - MD UK & Ireland [5]

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Yes. Sure. You're right on your observation, Rob, 14% to 25% of the leasing sample. That was clearly the whole of last year versus the first 6 months. So a relatively small sample. It's also worth -- just also worth bearing in mind that temp leases remain a relatively small proportion of the entire portfolio. And there's been a slight uptick, but were a single-digit percentage of the entire portfolio. And as I think came out in the presentation, what we're seeing here, and particularly with these CVAs and the general markets that we're in at the moment, those fashion operators who are perhaps they've got a lease renewal, particularly those models where we've had a number of lease renewals, those fashion operators come in to see, they look at the market, they're not sure whether they want to commit. And frankly, neither are we, with some of those less-desirable fashion operators. So suits us, suits them to put them onto a temporary lease while we either look for a better operator, or indeed, we look to locate them to an alternative space.

So we -- and indeed, they also provide us a good opportunity to then bring someone in as an uplift in rent, as you've seen in several of the examples in the pack. So yes, there's an uptick. Is it here to stay? I think it's a factor of the tough market at the moment. And as we do more permanent deals to those, the right type of brands you've seen here, then I suspect this will stabilize.

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Colm Lauder, Goodbody Stockbrokers, Research Division - Real Estate Analyst [6]

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Colm Lauder from Goodbody. Just 2 questions, perhaps more relating on the occupancy side and sort of thinking about the CVAs, but also some of the news this morning from Primark. And I know it's not in your top 10 tenants listed at the back, but if you can, perhaps some guidance around the percentage of rental exposure to the Primark brand across your centers. And then my second question is on -- related to the CVAs. You make a comment in the text that U.K. CVAs usually exclude the Irish stores, and obviously, from hearing on the ground, at your centers are a number of legal challenges to those CVAs from other institutional investors. And then perhaps, if you could elaborate on some cases where there have been U.K. CVAs that may have applied to some of your Irish stores and how that was interpreted and whether or not you would be challenged, the legal authority of the CVA in the Irish market.

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David John Atkins, Hammerson plc - CEO & Director [7]

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Yes. So Primark, we have 0 units in the U.K. let to Primark. We have a couple in France, and there have been no discussions of relatively new leases. And obviously, the CVA environment is very different. It doesn't really exist as such in France. In terms of the CVA impact, quite often, as we said, it doesn't happen in Ireland in the same way under the legal system there. It's much harder for a retailer to bring forward a similar restructuring. But we have been hit, particularly by House of Fraser. That's really one of the significant reasons our NRI number there has dipped, and we had 1 or 2 others. Mark, do you...

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Mark Richard Bourgeois, Hammerson plc - MD UK & Ireland [8]

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Yes, we did. There was a Monsoon store in Dundrum, which was part of an effect. It was a category A. And similarly, I think you'll recall a year or so ago, when Dublin has went through -- well, first, they went through a restructuring in Ireland. But clearly, we weren't necessarily impacted by that from an income perspective. So, yes, they -- yes, I think we do with each of these retailers on a case-by-case basis. In Ireland as well, you would note with 99% -- in excess of 99% occupancy through a very -- in a very strong position to relet or maintain income, even if there's a very short-term impact from the CVA or restructuring going forwards. And we'll see that with House of Fraser. We're very confident about that. The next one will come.

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Maxwell Wilson Nimmo, Kempen & Co. N.V., Research Division - Analyst [9]

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Max Nimmo, Kempen. Just from reading in the press, [Ben] (inaudible) talked about the CVAs and the process there. Particularly around equity stakes in these retail operators, it sounds like there has been a slight shift from where we were maybe 18 months ago. But just how do you guys look at that in terms of doubling down on your kind of operational risk from that point of view? If you could just comment on that [still].

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David John Atkins, Hammerson plc - CEO & Director [10]

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Yes. When we talk about an equity stake, it's not a true -- wouldn't necessarily be a true equity stake. So it's a sort of more upside equity stake in terms of it could be on an IPO or a disposal. So it's the ability of some capital event to take out some equity, effectively your capital, out of that business as some sort of recompense for the loss that we've suffered from reducing our rents down.

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Mark Richard Bourgeois, Hammerson plc - MD UK & Ireland [11]

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Yes. I think just one point to add to that. What it has enabled us to do, I think is, and this is the landlord community as a whole, is to improve our position, be more robust with retailers who are considering CVAs and certainly move towards a more palatable result. On the front.

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Rubinder Singh Virdee, Green Street Advisors, LLC, Research Division - Analyst of Research [12]

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It's Rob Virdee from Green Street Advisors. A couple of questions. So first one, Investment and Disposals Committee. I just wanted to know how the interaction between the Executive Committee, Executive Board, and the Investment Committee has been. Have there been any disagreements? In particular, I want to hone specifically on the U.K. investment market. What's happening there? Can you give me a bit of color on that? Secondly, I want to know about the omnichannel sales. And I want to know if you have any plans of trying to capture some of that growth in some of your own rental income.

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David John Atkins, Hammerson plc - CEO & Director [13]

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So the Investment Committee are relatively newly formed, as you know, we announced in February. Interaction has been very good. We have a number of committees in the business and the Board structure. So an Audit Committee, a Nominations Committee, Remuneration Committee. We have more interesting discussions in the Remuneration Committee, I can tell you. But no, it's been a very collaborative process. Ultimately, we're all at one. We're trying to strengthen our balance sheet, we're trying to affect disposals, and we are working within the markets that we are dealt with. So there is only so much we can do. But I think the result this morning with the Italie Deux disposal is a real big step forward for the business. And I look forward to continuing collaborative discussion with that Investment and Disposal Committee. In terms of -- sorry, the second question was...

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Nicholas Timothy Drakesmith, Hammerson plc - Director [14]

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Omnichannel and on leasing. How about Mark then...

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David John Atkins, Hammerson plc - CEO & Director [15]

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Mark, yes.

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Mark Richard Bourgeois, Hammerson plc - MD UK & Ireland [16]

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Yes. Thanks, Rob. I think the second question, there's 2 slides, which we referred to here, I think, first, with the leasing slide, second is the Slide 27, where it talked about online presence. I think the short -- the simple response to your question is we're starting to capture that. So what the -- if you look at Slide 22, what both the nonconsumer fashion brands and aspirational fashion doing. They're factoring into their bids on rent levels, factoring in the additional online sales they can get. And those more progressive brands with established omnichannel businesses are able to pay more for the physical space. So we certainly are building on our metrics, as you see on some of the analysis here. But the real proof of that will come through in the leasing. And we've seen evidences in the first 6 months, and we hope to build on that in the next 12.

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David John Atkins, Hammerson plc - CEO & Director [17]

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I think it is really important because I think people simplistically think if there is an impact online or an attachment, we should literally grab part of that revenue. Look, of course, that would be an often aim of ours. But I think you've got to rely on the fact that if we have this analysis, and this is proprietary analysis, and even out analyzing people's spending patterns after they have left our shopping centers, all done with their consent. But we have a lot of insight and data into their behaviors. Working them with retailers to make them understand how powerful locating one of our destinations is, that drives rental growth. And seeing the rental performance from the nonfashion retail particularly, up anywhere between 15% and 32% on previous rent passing, I think gives you good guidance that retailers themselves, particularly the differentiated consumer brands, F&B brands, leisure brands, who maybe can't get exposure they want online, are willing to pay for the value that we provide, not only within the store, but the halo effect we provide out and about in that [category].

So I'm confident we are beginning to generate and capture that benefit. And what we're really aiming to do is just really measure it. Working with our retailers, I think, that will come through in rents, if nothing else.

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Rubinder Singh Virdee, Green Street Advisors, LLC, Research Division - Analyst of Research [18]

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Can I just follow up on that point?

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David John Atkins, Hammerson plc - CEO & Director [19]

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Yes.

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Rubinder Singh Virdee, Green Street Advisors, LLC, Research Division - Analyst of Research [20]

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How much extra CapEx requirement is there from you to capture that?

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David John Atkins, Hammerson plc - CEO & Director [21]

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Well, the analysis and the sort of data analysis is very modest cost. I mean it runs to the sort of tens, hundreds of thousands of pounds. In our appendix, there is quite a lot of information again on maintenance CapEx if that's where the question is going. And you will see that the amount of spending is very modest. Most of it produces a direct return. And probably best to sort of look in the appendix rather than go through the absolute detail. But we're being very transparent about it. Jonathan?

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Jonathan Sacha Kownator, Goldman Sachs Group Inc., Research Division - Financial Analyst [22]

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Jonathan Kownator, Goldman Sachs. 2 questions, if I may. The first one on the Premium Outlets, and you had obviously very strong like-for-like rent growth. Is that a level, you think, that's sustainable, is linked to the substantial investment that you've recently put, particularly, in DR? I think it's mainly driven by DR, from your disclosure. And second question, on like-for-like rent growth on Page 13, there are significant contributions from other elements, particularly for U.K. and Ireland. If you can comment on that, please.

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David John Atkins, Hammerson plc - CEO & Director [23]

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Timon, do you want to cover Outlets?

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Nicholas Timothy Drakesmith, Hammerson plc - Director [24]

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Yes. So you're right to say that Value Retail has been the main driver of Premium Outlets growth in that rental income in the first half. It's not really anything to do with our investments. It's because of operational success, particularly at Bicester Village and La Vallée Village, east of Paris. You remember that Phase 4 of Bicester opened about 18 months ago. So occupancy was relatively low at the beginning of 2018. It's filled up very well. Those of you who visited recently will recognize as a fantastic experience. And they have had a lot of wins from digital marketing, digital marketing, which has drawn in consumers from around the globe. David mentioned plus 14% growth in tourism across the Outlet portfolio. And as you know, they tend to be higher-spending guests. So higher occupancy and lease-up have been the real drivers for like-for-like.

I'm not sure we want to give a specific number for expectations for like-for-like from outlets, but you would have thought broadly, 5% to 10% per annum. That would be the realistic target given that's the long-run sales density growth rate. And again, in the pack, we have shown you the history of growth in the Outlet business. I'm not sure I caught the question on the U.K. You had an NRI question about the U.K.?

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David John Atkins, Hammerson plc - CEO & Director [25]

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About the breakdown of U.K. and Ireland NRI...

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Jonathan Sacha Kownator, Goldman Sachs Group Inc., Research Division - Financial Analyst [26]

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Yes. Page 13...

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David John Atkins, Hammerson plc - CEO & Director [27]

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Mark, can you cover that, Page 13? Was that it, Jonathan?

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Jonathan Sacha Kownator, Goldman Sachs Group Inc., Research Division - Financial Analyst [28]

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Yes. So you have contribution from car park, commercialization and other, minus 2.1% in U.K. flagship, 1.7% in Ireland.

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Mark Richard Bourgeois, Hammerson plc - MD UK & Ireland [29]

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Yes. Yes. Okay. So U.K. flagships. It's a -- the key contribution to that was commercialization. There's been a bit of a shift in the way media advertising is being priced, and that's given us a -- there has been a headwind on that number. Ireland, principally around the car park, the impact initially of House of Fraser has a -- has, in the short term, had a bit of an impact on car park for numbers, and that's contributed to the income like-for-like in Ireland, probably the key points.

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Jonathan Sacha Kownator, Goldman Sachs Group Inc., Research Division - Financial Analyst [30]

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Perhaps just one follow-up on Timon. There's still, I think, a room for a potential occupancy increase in the Outlet business. Is this something that -- I mean have we reached a sort of structural level at this stage where the rest is structural vacancy? Or do you think you can still improve vacancy? And is it targeted perhaps at any specific village?

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Nicholas Timothy Drakesmith, Hammerson plc - Director [31]

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I think it's more in the VIA portfolio. Remember, we've created VIA from nothing in 5 years. And we've changed the management, we've appointed a new CEO this year. He has brought in a number of very talented people, and they've got specific targets to improve, selectively, occupancy. There's always a trade-off between having the right halo or driver brands versus just filling up the space. But I would suspect that in VIA, you might get a tick-up in occupancy somewhere in the mid-90s. But it's also worth remembering, as you know, that the nature of the Outlet business, is you get much higher rotation rates, you can go up to 25% of all units will change during the course of the year. And that's fantastic in terms of the guest experience, because there's always something new, there is a new phase here, a new fit-out. So I think that talks to occupancy levels being slightly lower than full-price shopping centers. But I think VIA occupancy will go up a bit next year, and that will help in that rental income growth in 2020.

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David John Atkins, Hammerson plc - CEO & Director [32]

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Robbie, behind?

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Robert Andrew Duncan, Numis Securities Limited, Research Division - Property Analyst [33]

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This is Robbie from Numis. In a statement, you comment that there's a potential to increase your stake in VIA there from 47% to 50%. How advanced is that, please? And can you give an indication of potential premium you'll have to pay to take out the 2 existing partners?

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David John Atkins, Hammerson plc - CEO & Director [34]

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Yes. So it's well advanced. We also highlighted that in Lisbon and something we would hope to move forward on in the next month or 2, and it's in the tens of millions of pounds to buy out the 3% that we don't own. But we'll give further color when we do the deal.

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Robert Andrew Duncan, Numis Securities Limited, Research Division - Property Analyst [35]

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Great. And then can you also confirm that the sale of Italie Deux, I appreciate there's some structuring around Italik, but this was a straightforward asset, that we're not seeing a repetition of other transactions that have taken place in the market?

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David John Atkins, Hammerson plc - CEO & Director [36]

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Very straightforward deal, Robbie. In your own words, the structuring in your mind, that doesn't feature. It's very equitable. We will own 25%. They will own 75%. We move forward from that.

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Robert Andrew Duncan, Numis Securities Limited, Research Division - Property Analyst [37]

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Okay. And then the last thing. I'm surprised no one else has asked on Elliott. There's been no mention of them in the meeting or the results statement. Could you just give an update on that? Have they continued to abide by their standstill agreement? And can you give us an indication, I can't remember the exact date, whether it was disclosed or not, of the end of that standstill?

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David John Atkins, Hammerson plc - CEO & Director [38]

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Yes. So Elliott's our shareholder, like many others, and we'll engage with them in the next week or 2. I'm sure the standstill agreement comes to an end by February next year. And as they announced in February this year, that they were very supportive of our strategy. As I said in my announcement, we're doing what we said we would do, so I'm hopeful that they will be [Audio Gap] an agreement and pleased that we are doing what we said we would do.

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Robert Andrew Duncan, Numis Securities Limited, Research Division - Property Analyst [39]

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Yes. And then my last question just comes back to Rob's question from earlier, just on the temp leases. So I see the mall ERVs were down 2.5%. But those -- and I appreciate, Mark, your response that it was sub-10% of overall leases at temporary. But a 55% discount versus ERVs on what is a rising proportion of leasing, I'm just interested that, that didn't have a greater impact on ERVs. And I appreciate it's 2.5% in 6 months and 4.4% over 12 months. But I'm surprised that's not coming down further to reflect that leasing environment. So any comment to that, please?

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Mark Richard Bourgeois, Hammerson plc - MD UK & Ireland [40]

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Yes, a lot of the value, they clearly have a -- they clearly look very closely at every one of the deals we do. The principal leasing made up 70% of those deals in the first half. And with some -- and over 60% of those were in positive ERV territory. So look, the value is they take a balanced view. They clearly add -- put more weight to those temporary deals -- those permanent deals, particularly to where there to be the right type of progressive occupiers that we're targeting. And they've come out with a 2.5% number. It's undoubtedly a tough market. There's undoubtedly some tough negotiations going. But I think those -- it's the -- to where those principal leases rely, that I think has broadly enabled us to keep things at that 2.5% decline, Robbie.

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David John Atkins, Hammerson plc - CEO & Director [41]

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Paul at the back.

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Paul J. May, Barclays Bank PLC, Research Division - Analyst [42]

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Paul May from Barclays. Just a couple more on the disposal, and apologies for being a bit pedantic, but it's not entirely clear. The disposal yield and pricing versus previous book values, is that just against the standing asset? Or does that include the value and the CapEx of the extension?

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David John Atkins, Hammerson plc - CEO & Director [43]

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It includes the CapEx of the extension. So that's taken into account. So 4.1% initial yield is the yield on Italie Deux. But in the pricing, it includes the forward commitment to buy the completed extension. And there's about GBP 17 million of CapEx to go. It's in the press release. Yes.

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Paul J. May, Barclays Bank PLC, Research Division - Analyst [44]

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Okay. And why is there a delay post completion of the extension for the completion of the sale?

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David John Atkins, Hammerson plc - CEO & Director [45]

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Simply because in case there are any leases on a turnover basis, it gives the opportunity for the -- actually, the rent to stabilize before then the pricing is fixed.

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Paul J. May, Barclays Bank PLC, Research Division - Analyst [46]

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Just a couple on reconciling, and I appreciate this is a difficult one and we've had this sort of discussion before in terms of averages and how they work through the system. But we're sort of starting to see, I suppose, the operational issues in the U.K. starting to come through in the valuations. And I appreciate Robbie's comment on ERVs, still probably a little bit further to go. But I'm just wondering with Ireland, obviously, there's a material negative impact on the NRI, but yet a positive impact on -- from income on the valuation seems a slight mismatch there. And just wondering, is the NRI now on Ireland below where you purchased the assets originally?

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David John Atkins, Hammerson plc - CEO & Director [47]

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So the -- a number of questions there -- so the final element, sorry, was the income below...

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Paul J. May, Barclays Bank PLC, Research Division - Analyst [48]

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So is the NRI on Ireland, given the 7% decline that you mentioned in the 6 months, is that now below -- just working through the maths, it appears to be below...

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Nicholas Timothy Drakesmith, Hammerson plc - Director [49]

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So that means -- I mean we can follow up, Paul, and show you a reconciliation. But we've been pretty successful in leasing up Dundrum and changing the quality, as well as Swords. So I think if you compare back to the original deal we did with the Irish government, NRI will have increased, but we'll do a reconciliation to show you, if you'd like.

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Paul J. May, Barclays Bank PLC, Research Division - Analyst [50]

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And then on the other one, I was just comparing that NRI movement in the 6 months versus a positive, I think it was, income movement on Irish values.

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David John Atkins, Hammerson plc - CEO & Director [51]

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Yes, because income means ERV as well as leasing up space. So within that, there is a negative, obviously, of the House of Fraser, but there's other positives happening as well. So when you build those together, in valuation terms, that's led to a slight positive for the income side of things. Albeit, overall, the value was marginally down, but that was more to do with a slight outward yield shift of 10 basis points.

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Paul J. May, Barclays Bank PLC, Research Division - Analyst [52]

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Sorry, just a final one on the disposal target. I appreciate the disposal target at the full year was, again, sort of values as at the full year, I presume. Given the further valuation decline, are you changing your views on absolute debt levels that are appropriate for the business? And does that mean sort of further disposals are expected to come over and above what you've previously targeted?

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David John Atkins, Hammerson plc - CEO & Director [53]

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I have said, I think I said it 2 or 3 times in the presentation, we will be targeting additional disposals, because I think in a weak market, there is no point being brave in this regard. We're very comfortable with what we've achieved today. We almost hit that target. But we will continue to dispose of assets.

Is that -- I think the questions in the room -- are there any questions on the -- anyone on the call, please?

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Operator [54]

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(Operator Instructions) And our first question over the phone line comes from the line of Ben Richford from Crédit Suisse.

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Benjamin Paul Richford, Crédit Suisse AG, Research Division - Research Analyst [55]

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I just wondered if you could give us some insight as to what your values are assuming for rental growth in that DCF just over the coming years. It's the first question. And just this Italie Deux, I know you said it's been a fairly vanilla transaction. But the delayed completion, I guess, is -- of the extension slightly in the favor of the buyer? And I just want to confirm from you that they're going to foot their half of the remaining CapEx and maintenance CapEx that you highlighted. Is that right?

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David John Atkins, Hammerson plc - CEO & Director [56]

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So first question was around the DCF assumptions.

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Nicholas Timothy Drakesmith, Hammerson plc - Director [57]

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Ben, do you mean an outlet or generally because a lot of the valuation is done by comparable evidence, as you know.

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Benjamin Paul Richford, Crédit Suisse AG, Research Division - Research Analyst [58]

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It's not just Outlets. So I guess I'd assume that the value is due DCFs and have -- for example, you're going to buy and compare -- give that value as assumptions per the DCF that they use. So I presume that's a DCF and then they use comparable evidence to corroborate that. So then it's a question less to do with the Outlets and more, I guess, what is the underlying rental growth assumption for the U.K. assets, starting with that.

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David John Atkins, Hammerson plc - CEO & Director [59]

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Yes. I think we might have to come back to you on that one because, obviously, we have quite a varied portfolio and a small retail park might have a different rental growth progression than the Bullring. And Dundrum Town Centre will be different from Ennis 12. So perhaps in future, we will join our peers in providing information on the DCF growth rates. But I don't think it's right for me today to sort of summarize it because it will be a pretty wide range. I would say, though, that a firm like Cushman & Wakefield are well aware of the trends going on in the occupational markets because it's an integrated firm and has a lot of individuals who work with tenants. So they are realistic. And as Mark has previously mentioned, ERVs have been marked down, as you will have seen. So we are comfortable as a Board that the assumptions that Cushman's have used are appropriate, but we will come back to you with a range.

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Benjamin Paul Richford, Crédit Suisse AG, Research Division - Research Analyst [60]

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Before we go to the next question, just a...

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David John Atkins, Hammerson plc - CEO & Director [61]

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And the next question, yes, about the delayed completions. So the main and the absolute bulk of the acquisition is in respect to Italie Deux. That will complete in the final half of the year once we get regulatory approval. That will be very much a rubber-stamping exercise, and that's entirely normal for a transaction of this size. So I don't think there's anything unusual there. And the delayed completion, as I explained, Paul, or one of the other questions around the development is that this is a forward commitment to acquire the extension once it's completed. So that is why there's a delay there. And I don't see there's a benefit for a buyer or seller. It depends which way you think the market is going to go in the meantime, I suppose.

And in terms of once acquisition takes place, then we are 75-25 partners. And they will burden -- take their burden of whatever CapEx is going forward. There are 1 or 2 items that we've included in the numbers, which are known about, such as an asbestos removal that we will be responsible for, but it's very minor.

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Operator [62]

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Our next question comes from the line of [Nicholas Lyle] from [Stanley].

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Unidentified Analyst, [63]

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So I wanted to ask about ERVs. Hello?

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David John Atkins, Hammerson plc - CEO & Director [64]

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Yes. It's not a great line. But if you carry on, we'll see if we can answer it.

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Unidentified Analyst, [65]

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I want to know, in your estimates, how far do you think your portfolio ERVs, specifically in the flagship centers, need to fall before those rent-to-sales ratios can be stabilized?

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David John Atkins, Hammerson plc - CEO & Director [66]

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Well, the rent-to-sales ratio actually was positive in the first 6 months of the year. So that generally is a good thing. But I -- and I've said it before. I genuinely believe, firmly believe, from the way we run our business, and because of that halo effect that we talked about on one of the slides, that a rent-to-sales ratio is really of much less relevance for you or us going forward than it has been in the past. So it's a metric that we look at less and less.

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Unidentified Analyst, [67]

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I understand that, but at the end the day, your valuation is dependent on where those rental affordability ratios are. Otherwise, your values wouldn't be marking down your ERVs, right? They wouldn't be marking down your values? So...

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David John Atkins, Hammerson plc - CEO & Director [68]

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If the value is, like us believe, that this added value that comes to a retailer from occupying a unit that goes beyond the sales that go through the unit, they will take that into account.

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Unidentified Analyst, [69]

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Okay. So if you look at your leasing negotiations and your discussions with your tenants, can you give us some kind of estimates of where the rates are relative to rates where they can go? I mean...

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David John Atkins, Hammerson plc - CEO & Director [70]

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Well, again, I'd come back to you, if you look at our leasing in the first half of the year, yes, we are recognizing that high street fashion leasing is negative and the rents were down 25%. So from that point of view, you can sort of see what they believe is the true value of those stores or the affordability. But for all other leasing, and that represented well over 90% actually of our leasing, we saw rents growing versus the previous passing rent of anything up to 30%. So we certainly don't seem to have an issue with affordability on incoming tenants and, particularly, those outside of that mass-market fashion bracket. And I would invite you, again, to look at the appendices. There's a huge amount of data in there that gives you further insight.

I think that is the last question. And so I'm going to wrap up as ever, just to say, thank you very much for coming along. We are -- just before you all jump up, we are going to try and finish on a positive note, looking at the business. As you leave, you will see -- we're going to play a video, which is from our new consumer campaign, which has just gone live to support our flagships, and that's being developed based on insight that I was talking about. And it's just that key point that consumers still want to shop in real life. So let me play this.