Hammerson executes €183m UK retail park disposals

UK retail REIT Hammerson has sold its Imperial Retail Park in Bristol and Fife Central Retail Park for a total of £164 mln (€183 mln) to Capreon, part of the Noé Group.

Imperial Retail Park comprises 32,200 m2 and is currently 97% let. It is anchored by B&Q, The Range, HomeSense, M&S Foodhall, Next and Boots, and was acquired in 2012 as part of the Junction portfolio.

Fife Central Retail Park, acquired in 2005, covers 30,200 m2 and is 95% let. Tenants include B&Q, Sainsbury's, M&S Simply Food and Next.

According to analyst Goodbody, the disposal of further non-core UK assets is in line with Hammerson's plans to trim its exposure to UK retail parks, a segment which is expected to bear the brunt of the anticipated declines in capital values in the UK retail sector.

Goodbody said that both assets were dominant regional centres and produce solid incomes with low vacancy rates. The sale reflects a discount of 10% to December 2017’s book value and equates to a net initial yield of 7%.

According to a report in Monday's FT, Hammerson is expected to announce a programme of asset sales this week as it seeks to appease angry shareholders after a failed attempt to buy its largest UK rival Intu. The FTSE 250 company and its chief executive, David Atkins, face pressure to sell assets in order to return value to shareholders and prove the book valuations of its portfolio, with its shares trading at a steep discount.

The two deals announced on Monday bring Hammerson’s total disposals in 2018 to £300 mln, with a target of £500 mln for the full year.

Goodbody forecasts cumulative value declines of 25% in Hammerson’s UK retail parks portfolio for 2018 to 2020, and said that the new disposals were therefore 'timely'.


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