David Atkins’ Time At The Hammerson Helm, Reviewed
This week Hammerson chief executive David Atkins announced he was stepping down after a bruising few years for the company. He will leave in spring 2021 at the latest, while the company looks for a successor.
Atkins’ roughly decade in charge of the shopping centre REIT has been a wild ride for real estate. Here are the numbers that tell the story of his time in charge.
-70. To be more precise, -70.2%, the total return from Hammerson shares during his time in charge of the company from 1 October 2009 to today, according to Bloomberg data. For context, during that period Landsec shares produced a total return of 41%, British Land 33%, Unibail Rodamco Westfield -31% and New River Retail -62%. The only major REIT Hammerson outperformed in this period was Intu, which produced a -97% return.
520 million. One of the sticks often used to beat Atkins is his sale of Hammerson’s London office portfolio to Brookfield in 2012 for £520M in order to focus on retail — Brookfield went on to make a killing on the deal, while Hammerson’s fortunes subsequently took a dive. But it is worth remembering that at this time, analysts and REIT shareholders were calling for companies to become sector specialists, and the move was greeted positively.
3.4 billion. £3.4B is the price Hammerson offered to pay for rival Intu in December 2017. Shareholders disliked the idea of the deal so much they forced Hammerson to drop it. The shareholders were right: Today Intu is valued by the stock market at just £76M, with its assets worth less than the loans secured against them in many cases.
635. This is the number that more than any other might come back to haunt Atkins. In early April 2018, Hammerson turned down a takeover offer from larger French peer Klépierre, which would have seen the company sold for 635p a share, or about £5B. It turned down the offer as too low.
Today, the company’s shares are valued at just 76p, a market capitalisation of £565M. Since it turned down Klépierre’s offer, the market for retail has gotten even worse, analysts point to Hammerson’s high level of debt and investors like Orion walked away from buying the company’s assets even at knock-down prices. It seems like a deal Hammerson should have taken.