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Hammerson mulls £350m retail park sales

The locations involved in the sale reportedly consist of retail parks in Falkirk, Didcot, Middlesbrough, St Helens, Telford, Merthyr Tydfil, and Rugby

Shopping centre owner Hammerson has confirmed it is in talks to complete the sale of seven retail parks to Brookfield, a Canadian private equity firm, for roughly £350m.

According to the Times, the funds will be used to strengthen the group’s balance sheet, providing the quickest way for the group to pay down debt.

The locations involved in the sale consist of retail parks in Falkirk, Didcot, Middlesbrough, St Helens, Telford, Merthyr Tydfil, and Rugby.

However, in a response to press speculation, Hammerson said that “there can be no certainty that a transaction will take place or the terms on which any transaction may occur”.

If completed, the transaction would follow actions taken last year by Hammerson that wrote down the value of its portfolio by nearly a quarter to £6.3bn.

Attempts to clear a portion of the group’s £2.2bn debts have so far been negatively impacted by shortfalls in rent.

Hammerson did reveal that its net debt reduced by £609m for the year ended 31 December 2020, with the latest sales set to further decrease the group’s debts.

Alongside the results, Rita-Rose Gagné, chief executive at the firm, said: “As our results show, Hammerson was hit hard. 

“The retail sector, already in the grip of major structural change, has been significantly impacted by the restrictions imposed to tackle the pandemic, and we’ve also seen an increasing number of retail failures.” 

She added: “Combined, this has resulted in the largest fall in net rental income and UK asset values in the group’s history.”

Aiming to avoid a similar outcome to Intu, which collapsed in June 2020, Hammerson has raised significant cash injections through an emergency rights issue and other sales, and has also reportedly brought in restructuring experts from EY.

Retail Sector has contacted Hammerson, while Brookfield declined to comment.

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