Hammerson has launched a 10-year, £350m (€476m) bond – its first sterling bond for a decade.

The UK REIT issued the bond at 173 basis points over reference Gilt, with an annual coupon of 3.5%. 

The issue was oversubscribed.

Hammerson CFO Timon Drakesmith said: “This transaction is the first sterling bond issue by Hammerson for almost 10 years and represents a welcome return to a home funding market. We are appreciative of the support shown by our key bond investors.”

Hammerson chose to issue in sterling rather than euros, as the former diversifies its debt-book investor base.

The wide rate differential between sterling and euro debt means it was cheaper for the company to issue in the former than achieve euro rates via the swap market. 

The bond will help finance the REIT’s recent purchase of a loan portfolio in Ireland with Allianz Real Estate backed by retail property assets.

The portfolio was sold by Ireland’s National Asset Management Agency. 

Allianz is investing €900m, while Hammerson said its share of the acquisition was approximately €1.2bn.