UK REIT Hammerson and its partners in the VIA Outlets venture - APG, Meyer Bergman and Value Retail - have inked a deal to buy four European outlet centres valued at €587 mln.
The retail venues, located close to major cities in Germany, Portugal, Spain and Poland, represent a blended net initial yield of 5.5%. The transaction takes the total size of the VIA Outlets portfolio to €1.1 bn across 10 assets.
'This is a rare opportunity to acquire strong outlet centres in an off-market transaction. Well positioned European outlets continue to deliver strong sales growth supported by an improving customer offer and increasing tourist numbers across Europe,' commented Timon Drakesmith, CFO and managing director, Premium Outlets, Hammerson. 'Our active capital recycling programme is tilting Hammerson’s portfolio towards faster-growth end-markets to reinforce our consistent earnings growth profile,' he added.
The largest of the assets is in Zweibrucken, Germany, representing 29,000 m2 with 114 tenants. It is located on the border between France, Germany and Luxembourg and was Germany's first established retail outlet. Its sales density is the highest across the VIA Outlets portfolio at €6,000 per m2, with an annual footfall of 3.8 million.
The other assets include a 28,000 m2 scheme close to Porto, with average sales density of €4000 per m2, a 16,400 m2 outlet in Spain north of Seville with a sales density of €3,600 per m2, and the only outlet centre in the western Poland region, located in Wroclaw. This outlet has a total area of 15,800 m2 and a sales density of €3,300 per m2.
Hammerson - which has a 47% interest in VIA Outlets - said that it's share of the acquisition funding would be €170 mln, taking its exposure to the European outlet market to around 17% of its gross asset value. In addition, €435 mln of its €500 mln disposal programme has already been completed with further sales identified for 2017.
VIA Outlets is expanding its team in the light of the portfolio purchase, with secondments and external hires set to boost its asset management, marketing and finance capabilities.
