Hammerson has acquired a 50 per cent stake in Manchester Arndale for £218m as the shopping centre owner expands its portfolio with its first major external acquisition in more than a decade.
The deal, which completed on 29 July, values the entire shopping centre at around £436m and represents a topped-up net initial yield of 7.8 per cent.
Hammerson said the acquisition would increase its scale and extend its geographic footprint into one of the UK’s largest retail markets.
Manchester Arndale attracts more than 45 million visitors annually and serves a catchment of 6.4 million people, which Hammerson described as the largest outside London.
Hammerson eyes Arndale overhaul
The Bullring and Brent Cross owner plans to modernise the centre’s public areas, improve wayfinding and introduce more global retail brands.
It will also explore dividing some of the shopping centre’s larger legacy units into smaller spaces that it believes are better suited to retailers’ current requirements.
Hammerson chief executive Rob Wilkinson said Manchester was “one of Europe’s most dynamic and fastest-growing urban economies”, adding that the Arndale occupied a prime position at the heart of the city.
He said the property giant saw a “clear path” to increasing income and creating value by using its retail property platform to enhance the destination.
Hammerson intends to raise around £190m through an equity issue to help fund the acquisition, with the remaining consideration financed from its existing cash resources.
The fundraise will include an institutional placing, an offer for UK retail investors and a combined investment of approximately £230,000 from several Hammerson directors.
Hammerson upgrades profit outlook
The property group expects the acquisition to increase earnings immediately and contribute approximately £7m to its 2026 earnings.
Hammerson has upgraded its full-year guidance and now expects EPRA earnings to rise approximately 27 per cent to £132m.
The deal was announced as Hammerson reported a three per cent increase in footfall and a five per cent rise in like-for-like net rental income during the first half.
Occupancy across its flagship portfolio climbed to 96 per cent, marking its highest first-half level in seven years, while EPRA earnings jumped 33 per cent to £64m.
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