The FTSE 100 property group Hammerson saw profits drop by more than half to £317m in the year to December on a fall in the capital values of its shopping centres and retail parks.

The group said the drop, from £728m a year earlier, was partly explained by higher stamp duty in the UK and transfer taxes in Paris weighing on property prices, but also resulted from “weak trading and letting” at the Jeu de Paume shopping centre in Beauvais, France.

Hammerson, which focuses on retail property around Europe, said that adjusted profit — with valuation changes excluded — rose 9.4 per cent to £230.7m. The group plans to increase its dividend by 8.6 per cent to 13.9p a share.

David Atkins, chief executive, said:

During the year we have significantly grown and enhanced the portfolio, adding new retail space in faster-growth markets including Dublin, Leeds and Birmingham, and extending our presence in the European outlets market.

To fund these growth opportunities, we successfully refinanced over £1.2 billion of debt and executed our planned disposal programme, generating £635 million.

He also noted “UK retail headwinds and geopolitical uncertainty” but added that “I am confident that we have a resilient and adaptable business with multiple opportunities to drive similar levels of growth and therefore continue to deliver sector-leading income-focused returns.”

The group’s borrowing rose from 54 per cent to 59 per cent during the year. Net rental income was up 8.8 per cent to £347m, or up 2.2 per cent on a like-for-like basis.

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