Anglo-French developer and landlord Hammerson has nearly completed its divestment programme for 2019, after pledging to reduce debt.
At the same time, it has pushed ahead with new lettings in its UK centres as it looks to bolster its portfolio.
Last month, Hammerson exchanged contracts with AXA Investment Managers – Real Assets, acting on behalf of clients, for the sale of a 75% stake in the Parisian shopping destination Italie Deux, and the forward sale of 75% of the Italik extension for a total of €473m.
The disposal reflects a 4.1% net initial yield on Italie Deux. The total sale price represents a 8.5% discount to December 2018 book value and marginally below end of June 2019 book value.
As part of this transaction Hammerson will complete the Italik extension, with a projected cost to complete of £18m as at 30th June 2019, in addition to other committed refurbishment works.
Italie Deux is located on the left bank of Paris and provides a mix of retail, leisure and cultural space. Leading brands within the flagship destination include Printemps, Fnac, Zara, Sephora and Carrefour. A 1,000-seat theatre, Le 13ème Art, also opened in the centre in September 2017, offering a new cultural scene in Paris. A partnership has recently been signed with one of the main theatres in Paris, le Théâtre de la Ville.
The 6,400 sq m Italik extension, will deliver a further 1,900 sq m of retail, 1,800 sq m of F&B, 1,500 sq m of co-working and innovative activities, and 1,200 sq m of events and leisure space. Italik is due to open in September 2020 and is 41% pre-let. Closing of the transaction relating to the extension will take place 18 months after the extension completes.
The new joint venture follows the creation of the first partnership with AXA IM – Real Assets in 2014 at Hammerson’s Cabot Circus. As with the existing joint venture in Bristol, Hammerson will continue to manage the French flagship destination.
The latest transaction takes Hammerson’s total disposals in 2019 to £456m and over 90% of its £500m target for the year. This follows the sale of £33m of retail park assets in the first half of the financial year.
The Italie Deux element of the transaction is expected complete in autumn 2019 and the proceeds will be used to reduce debt and build further balance sheet strength. Following the deal, Hammerson’s net debt stands at £3.1bn on a pro forma basis.
RPA Perspective David Atkins, Hammerson Chief Executive, said: “This transaction provides an opportunity to realise substantial disposal proceeds whilst also retaining an interest in a high quality European destination with a long term partner.
“Our number one priority is to reduce debt and build balance sheet strength. This transaction means we have reached over 90% of our 2019 disposal target. We are in advanced negotiations on additional asset sales and the creation of this joint venture once again highlights the appetite for investors to partner with skilled sector specialists.”
Hammerson and Aberdeen Standard Investments have this month secured two new retailers for the Brent Cross, London centre’s premium offer in mall five which has been reconfigured and refreshed. Specialist multi-brand British beauty retailer Space NK is set to open a new boutique alongside Waterstones, which has launched one of the bookstore’s new concepts.
Iain Mitchell, UK Commercial Director at Hammerson, said: “Both Space NK and Waterstones are great examples of brands that continually innovate and place in-store customer experience at the forefront of their strategy. Brent Cross is an iconic destination and we are working hard to ensure it continues to engage and excite consumers by curating a retail and leisure mix that offers more than just products. These latest signings are testament to the centre’s enduring appeal as destination where people and brands want to be.”
Hammerson has also announced that Waterstones is to launch at Silverburn, Glasgow this September. The new store will be the first ever dedicated bookshop at the destination.
The 6,000 sq ft unit, located adjacent to New Look, will offer the brand’s comprehensive selection of books, alongside unique stationery and gift collections. Spanning over both the ground and first floor, the new store – designed by an in-house team – will feature a dedicated section for local authors. Founded in 1982, today Waterstones employs over 3,000 booksellers and has over 290 stores.
