Real Estate

Bullring owner Hammerson to sell off £1.1bn of properties


Hammerson, the UK shopping centre operator, plans to sell all of its out-of-town retail parks and reduce its exposure to department stores in a bid to appease disgruntled investors.

The owner of London’s Brent Cross and Birmingham’s Bullring aims to offload £1.1bn of properties by the end of 2019 as it exits the retail park sector and focuses on “flagship retail destinations”.

Hammerson now owns 13 retail parks across the UK, after announcing on Monday that it had agreed to sell its Imperial retail park in Bristol and Fife Central retail park in Kirkcaldy for a total of £164m to the property investment firm Capreon.

Shareholder pressure has been mounting on Hammerson since April when it abandoned a £3.4bn buyout of its smaller rival Intu, the company behind Manchester’s Trafford centre, and rejected a £5bn takeover approach from the French shopping centres group, Klépierre.

David Atkins, the Hammerson chief executive, said on Tuesday it was changing its strategy to address the shift in the wider retail market.

“Through increasing the level of disposals, including exiting the retail parks sector, we will now focus solely on winning destinations of the highest quality: flagship retail destinations and premium outlets,” he said. “These are the venues we believe will maintain relevance and outperform against the shifting retail backdrop.”

Hammerson said it would cut by a quarter the amount of space given over to department stores, while high street fashion space would be reduced by a fifth, replaced by “aspirational fashion, leisure, events and lifestyle spaces”.

It comes as Britain’s department store chains and other high street retailers struggle against a backdrop of higher costs, waning consumer confidence, and competition from online-only retailers.

Debenhams has issued three profit warnings since Christmas and came under fresh pressure last week when it emerged that credit insurers had reduced cover for suppliers to the company.

House of Fraser announced last month that it would close 31 of its 59 stores in the UK, including its flagship shop on London’s Oxford Street, with the loss of about 6,000 jobs.

Hammerson also announced that it would buy back up to £300m of shares, and that it was shrinking its board, reducing the number of executive directors from four to two.

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Peter Cole, its chief investment officer, will step down from the board at the end of 2018, after 29 years with the property company.

Jean-Philippe Mouton will also step down from the board at the end of the year, but he will remain in his role as managing director of the company’s French business and will continue to be responsible for marketing.

Hammerson reported a 0.5% increase in adjusted profits to £120m in the first half of 2018 and net rental income fell 3% to £178.5m compared with the same six months last year.

Shares rose 1.6% to 534p.

Hammerson’s retail parks

Abbey retail park – Belfast
Abbotsinch retail park – Paisley
Brent South shopping park – London
Central retail park – Falkirk
Cleveland retail park – Middlesbrough
Cyfarthfa retail park – Merthyr Tydfil
Dallow Road – Luton
Elliott’s Field shopping park – Rugby
Parc Tawe retail park – Swansea
Ravenhead retail park – St Helens
St Oswald’s retail park – Gloucester
Telford Forge shopping park – Telford
The Orchard Centre – Didcot



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