UK REIT Hammerson said on Thursday that it has completed the sale of its seven retail park assets to Canadian investor Brookfield for £330 mln (€380 mln) in cash.
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 deal – which concludes Hammerson’s exit from the UK retail parks sector - represents an 8% discount to the 31 December 2020 book value of £357 mln and a 14% discount to the end-March 2021 value. The total sale price of the transaction represents a net initial yield of 8.6%. The deal was first announced in April.
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.
The proceeds will be used by Hammerson to further strengthen the balance sheet, reducing net debt, which was £2.2 bn at 31 December 2020, and increasing liquidity, which stood at £1.7 bn at the same date.
The sales price is 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.
