Institutional landlord Hammerson has confirmed the sale of its remaining portfolio of retail parks at a “wider than expected” discount, as it looks to shore up its balance sheet.
The landlord said this morning it had sold its nine remaining retail parks across the UK – with seven being purchased by Orion’s European real estate fund for £395m, with a further two parks in Swansea and Belfast being sold separately for a combined £55m.
The deals combined will generate £455m and bring Hammerson’s total disposals since the beginning of last year to £975m.
Hammerson said the parks were sold at a 22.2% discount from the June 2019 book value, which analyst Goodbody notes “wider than we had expected” having forecast sale proceeds of £490m last year.
The analyst noted this reflected the “deterioration in market conditions over the last eight months”.
This brings Hammerson’s remaining stakes in retail parks to just one, with London’s Brent Cross, which is currently up for sale.
Hammerson chief executive David Atkins said: “Against a challenging retail and investment backdrop we have exited the retail parks sector.
“Having achieved disposals of close to £1bn since the beginning of 2019, our focus remains on strengthening our balance sheet to create further resilience.”
The company had a torrid 2019, as its rental income across its flagship destinations was badly impacted by the raft of retail CVAs and administrations.
In the first half of the financial year, rental income fell 6.8% and capital returns of negative 4.4%.
It has since unveiled its mixed-use ‘City Quarters’ strategy, which aims to build residential and office space around existing shopping centre locations, in a bid to drive footfall and open up new revenue streams.
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