Hammerson acquires French mall

UK and French REIT Hammerson has acquired a majority stake in Saint Sébastien shopping centre in Nancy, North-East France, from AXA Real Estate.

The investment volume for 75% of the gross lettable area comes to £109 mln (€132 mln). Completion of the transaction is expected by the end of March 2014.

The 24,000 m2 centre comprises 105 shops and restaurants with over 1,000 car park spaces, and is anchored by Monoprix, Intersport, C&A and Sephora. It is centrally located in Nancy, the principal city between Paris and Strasbourg.

Nancy is one of France's top 20 cities and the shopping centre adjoins 'Nancy Grand Coeur', the town centre regeneration area which is planned to create over 200,000 m2 of new offices and retail, plus over 700 new homes. Saint Sébastien, with an annual footfall of 8 million, is the only shopping centre in central Nancy, and is the dominant retail centre within the wealthy 45-minute catchment area.

The stake generates gross annual rents of £7 mln, representing a 6% yield on the purchase price including transaction costs. Hammerson will assume responsibility for managing the centre which is fully occupied and offers reversionary potential, with recent deals struck about 10% above previous passing rents.

Hammerson CEO David Atkins said: 'This acquisition is consistent with our strategy of growing income by creating successful retail destinations. This is a rare opportunity to selectively extend our retail footprint in France, and provides a good opportunity for us to use our expertise to create value through active management of the centre. Nancy is a vibrant city with a wealthy catchment area, in which Saint Sébastien has the prominent retail position.'