Hammerson shelves plans to develop in UK until at least 2011

THE owner of a string of major shopping centres, including Glasgow's Silverburn and the Bullring in Birmingham, is to head to France for new projects until the UK economic recovery is on firmer ground.

Hammerson, whose other assets include Union Square in Aberdeen and Kirkcaldy's Fife Central Retail Park, is investing 430 million in new developments in Marseille and Paris this year.

But new work in the UK is not likely to start again until at least 2011. Hammerson yesterday said that while there had been signs of a recent recovery, the economic outlook "remains uncertain".

France's retail sector has not been hit as hard by the recession, mostly by escaping the large numbers of retail administrations that have been rife in Britain since the recession began.

Hammerson said: "In France, consumer confidence remained low throughout 2009, resulting in falling retail sales.

"However, with the French economy returning to growth in the second quarter, consumer confidence has shown a gradual improvement and retail sales grew throughout much of the second half of the year."

Hammerson's caution comes despite a marked bounce back in UK property values, with its British portfolio up 11 per cent in value in the final six months of 2009, while France dropped 3 per cent. The group reported losses before tax of 453.1m for 2009, far less than 2008's 1.6 billion plunge into the red as property values began to recover last year.

Hammerson's net rental income fell 2.1 per cent last year, although it said it saw growth of 1.1 per cent in like-for-like income, with disposals stripped out. Its total property portfolio value endedat 5.1bn, down 9 per cent for the year as a whole due to a dire first half.

The group has 66 per cent of its property portfolio in the UK and the remainder in France.