Hammerson disposes of retail parks portfolio
Hammerson has exchanged unconditional contracts on the sale of a portfolio of seven retail parks to Orion European Real Estate Fund V (Orion) for a headline price of GBP400 million with expected net proceeds of GBP395 million.
This transaction is the largest UK retail parks portfolio sale in the past decade. The sale follows Hammerson’s strategic decision, announced in July 2018, to exit the retail parks sector over the medium term to create a focused portfolio of flagship assets, premium outlets and City Quarters across major European cities.
Separately, Parc Tawe, Swansea (pictured) and Abbey Retail Park, Belfast have been sold individually generating proceeds totalling GBP55m. Combined with today’s portfolio sale of seven retail parks, this final tranche of disposals totals GBP455m and represents a net initial yield of 8.7 per cent, with a discount to a June 2019 book value of 22.2 per cent.
In total, Hammerson has sold 14 retail parks since July 2018, generating sales proceeds of GBP764m to reduce the Group’s debt and further strengthen the balance sheet. The Group has an interest in one remaining retail park, Brent South, part of the Brent Cross estate, which is held in a joint venture with Aberdeen Standard Investments and is marked for sale.
David Atkins, Hammerson’s Chief Executive, says: “Against a challenged retail and investment backdrop we have exited the retail parks sector. Having achieved disposals of close to GBP1bn since the beginning of 2019, our focus remains on strengthening our balance sheet to create further resilience. The completion of this strategic disposal enables us to create a more concentrated portfolio of flagship venues, premium outlets and City Quarters which we expect will deliver greater levels of both income stability and growth over the medium term.”