[On :Freetrade:] Hammerson (HMSO) 📈

Hammerson plc is a major British property development and investment company. The firm switched to real estate investment trust status when they were introduced in the United Kingdom in January 2007.

@Ross1 this is already on Freetrade!

Would be great to get another big UK based REIT in. Hammerson has just had a bit of a reshuffle in their top tier management and I think there’s some big potential for growth in the coming months. Not the most ‘aesthetically pleasing’ stock but I think it’s big enough to make the cut. From a snippet of the research I’ve done:

  • Trading at a large discount to NAV.
  • Asset disposals likely to reduce debt load.
  • Rent collection expected to pick up as shoppers return to stores.

@Viktor please could you close this one as there is already a thread?

I wouldn’t give too much weight to the discount to NAV since the assets are largely commercial real estate which most certainly are worth less after the poor rent collection and poor prospects for rent rates.

They have a strong financial backing with Lighthouse capital and a few other activist investors so I think they’ll be able to weather the storm. Also their French assets can be liquidated relatively easily which will take a bit of pressure off their leverage. Time will tell I guess!

Not showing up in my search.

Are you using an ISA?

Yes.

Ah there is the issue then. At the moment REITs can’t be purchased in ISAs due to the tax complications that arise.

I see. Any idea when they’ll be back up?

I know it’s on the timeline but there aren’t specific dates so I can’t answer I’m afraid. You can earn £2,000 a year in dividends tax free so you could just buy it in your basic account.

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I agree that they’ll survive, but expect them to take massive writedowns as it becomes clear some of the assets aren’t worth what they are listed at.

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Never before had we had such a severe recession alongside a need for companies to limit people congregating in workplaces. It will be interesting to see how commercial property comes out of this but I don’t imagine it will do well.

One area I am very bullish on is inner city warehouses which can be converted and used as distribution centres, there are a couple of REITs which invest in just this.

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True, they’ve already taken a proper beating. Sure their NAV is currently massively overstated, but the question is by how much. They’re currently trading at a 92% discount to (overstated) NAV.

Which reits / companies are you looking into for this?

I don’t want to appear like I am giving advice by listing the ones I have invested in but this website is a good place to start:

https://www.reit.com/what-reit/reit-sectors/industrial-reits

I also have a brokerage account in Australia where I have most of my REITs but as those are not available in the UK, it is not relevant.

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A friend has bought into these and is doing very well, but unable to buy/sell at the moment.

Also don’t appear to be coming on the search. Anyone know what’s going on?

Hi there,

Hammerson is undergoing a consolidation and rights issue. For the moment we have disabled Hammerson from Discover and customers are unable to buy/sell. We sent the below note out to all holders a few days ago that provides additional context. Any questions, please reach out in app and someone from customer ops will get back to you.

Alex

Hammerson plc have proposed a Rights issue and a Consolidation.
Consolidation:
A consolidation has the effect of reducing the number of a company’s shares in circulation. Subject to shareholder approval, Hammerson are proposing to consolidate every 5 existing shares into 1 new share.
The Ex-date for the consolidation is the 2nd September 2020. This means that for every 5 shares that you hold as at close of business on the 1st of September 2020, you will receive 1 new consolidated share rounded down to the nearest whole share.
We are due to receive the new shares on the 2nd September 2020 and we will credit them to your portfolio as soon as possible once received.
If you hold less than 5 shares you will no longer be a shareholder in Hammerson plc and you will receive a cash payment in respect of your fractional share entitlement.
Rights Issue:
We will be sending out a notification in regards to the Rights issue following the consolidation becoming effective.