UK REIT Hammerson is in talks to sell its UK retail parks portfolio to Canadian investor Brookfield for a figure believed to be in the region of £350 mln (€405 mln).
The seven-asset portfolio had a book value of £384 mln at the end of the company's full year results for 2020, released in March 2021.
The portfolio spans 205,000 m2 and comprises Central Retail Park in Falkirk, Cleveland Retail Park in Middlesbrough, Cyfarthfa Retail Park in Merthyr Tydfil, Elliott's Field Shopping Park in Rugby, Forge Shopping Park in Telford, Ravenhead Retail Park in St. Helens and The Orchard Centre in Didcot.
According to analyst Goodbody, the present Brookfield bid is actually higher than a previous offer by Brookfield made in early 2020. However, it is still significantly below a putative deal with Orion, which collapsed last year when the pandemic took hold.
Orion bid £400 mln for the portfolio of assets last April, but pulled out in May as lockdowns gripped the retail sector, notifying Hammerson that it 'had resolved not to complete the purchase agreement'. However, Hammerson did get to keep Orion's £21 mln deposit at that time.
'With improving levels of liquidity in this market segment, and comparatively robust income performance in the second half of 2020, we were relatively optimistic for the retail parks disposal in early 2021,' said Goodbody's Colm Lauder.
Lauder added: 'This is an important transaction for Hammerson as it is a critical element of their balance sheet strengthening process. This is also welcome news as the price mooted will be ahead of market expectations.'
