CAPE TOWN – Hammerson said on Friday that it would sell seven retail parks to Orion European Real Estate for £400 million in the biggest sale of UK retail parks in the past decade, as it finalised a strategy to exit the sector altogether.
The sale, expected to net £395m for the group, follows a decision a in July 2018 to exit the retail parks sector over the medium term, and instead create a focused portfolio of flagship assets, premium outlets and City Quarters across major European cities.
Total disposals of retail parks since the start of 2019 amounted to £975m.
Separately, Parc Tawe, Swansea and Abbey Retail Park, Belfast had been sold individually, with proceeds of £55m.
Combined with today’s sale of seven retail parks, the disposals represent a net initial yield of 8.7 percent, with a discount to a June 2019 book value of 22.2 percent.
In total, Hammerson has sold 14 retail parks since July 2018, sales proceeds of £764m to reduce debt and strengthen the balance sheet.
It holds 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.
Hammerson’s chief executive David Atkins said: “Against a challenged retail and investment backdrop we have exited the retail parks sector. Having achieved disposals of close to £1 billion since the beginning of 2019, our focus remains on strengthening our balance sheet to create further resilience.”
He said the completion of the seven retail parks enabled the group 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.”
Hammerson’s share price was unchanged at R43.77 on the JSE early Friday morning.