Hammerson has revealed its previously agreed £400m sale of seven of its retail parks has been put in doubt after prospective buyer Orion European Real Estate Fund said it does not intend to complete the deal.
Hammerson revealed that under the terms of the unconditional sale and purchase agreement, Hammerson and Orion are required to complete the transaction on 23 April 2020.
However it said despite this, and “notwithstanding continued preparation between legal and property teams”, Orion has notified Hammerson that it does not intend to complete the Transaction on 23 April as it is obliged to do under the terms of the agreement.
In response to the news the real estate investment firm said in an update: “Hammerson remains ready and able to comply with its completion obligations under the SPA, and is in dialogue with its counterparties at Orion.
“In accordance with the terms of the SPA, if Orion fails to complete on 23 April 2020, Hammerson will serve a notice to complete on Orion specifying that completion must occur by no later than 6 May 2020.”
It continued: “If completion does not occur by such date, Hammerson will take steps to terminate the SPA and the £21m deposit which is currently held in escrow will become immediately due and payable to Hammerson.”
The news comes just a month after it revealed it had collected only 37% of its Q2 rent bill and has suspended its dividend amid the coronavirus outbreak.
In a trading update released on 30 March, Hammerson said that with figures adjusted for rent deferred, switched to monthly payment, and a nominal proportion waived, the figure rises to around 57% of rent due.