// Hammerson exchanges unconditional contracts on the portfolio sale of its 7 retail parks to Brookfield for £330m
// The deal will complete Hammerson’s exit from the UK retail parks sector
// Money from the divestment will be used to reduce Hammerson’s £2.2bn debt pile, among other things
Hammerson has agreed to sell all of its retail parks to Canadian investment firm Brookfield, in deal that will complete the shopping centre giant’s exit from the UK retail parks sector.
The £330 million deal is eight per cent less than the book value of the portfolio of seven retail parks at the end of last year.
Together with other recent sales, it takes Hammerson’s gross proceeds from the disposals to £403 million so far this year, at an average six per cent discount to the December 31, 2020 valuations.
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The completion of the transaction is expected by the end of May.
The money from the divestment will be used to reduce Hammerson’s £2.2 billion debt pile and increasing liquidity, which stood at £1.7 billion at the end of 2020.
Hammerson reported a loss of £1.7 billion for 2020 and issued a longer-term debt warning, as the Covid-19 pandemic knocked the value of its properties.
In its most recent quarterly rent billing, it signalled that it had only managed to collect 48 per cent of rent owed by its commercial tenants in the UK.
“As highlighted at the full-year results, our immediate priority is to strengthen the balance sheet,” Hammerson chief executive Rita-Rose Gagne said.
“This latest disposal is a positive step.”
The seven retail parks that were sold to Brookfield comprise a total of 2.2 million sq ft of space.
These parks are Central Retail Park in Falkirk, Cleveland Retail Park in Middlesbrough, Cyfarthfa Retail Park in Merthyr Tydfil, Elliott’s Field Shopping Park in Rugby, Telford Forge Shopping Park in Telford, Ravenhead Retail Park in St Helens, and The Orchard Centre in Didcot.
Hammerson’s previous and recent disposals consist of Brent South Shopping Park, which sold for £22 million, as well as its minority interests in Nicetoile and Espace Saint Quentin for £73 million.
“We continue to focus on delivering operationally,” Gagne said.
“We have successfully welcomed back our customers in England to our flagship venues, with footfall levels well above the June 2020 reopening, and look forward to reopening our other destinations as local restrictions allow over the coming months.”
Retail parks have been resilient during the pandemic, partly because essential retailers are a significant part of their line-up and also because their locations provide safer drive-in and open-air shopping experiences.