UK REIT Hammerson announced on Friday that it has completed the sale of its Victoria Gate and Victoria Quarter shopping centres to entities related to Swiss investor Redical Holdings for £120 mln (€144 mln) in cash.
The price is in line with the 30 June 2021 book value, which represented a net initial yield of 7.4%.
Known as Victoria Leeds, the urban development combines glass-roofed Victoria Quarter, home to Harvey Nichols and with 19,400 m2 of space, and the recently developed Victoria Gate which is anchored by a 24,000 m2 John Lewis flagship store and provides 37,600 m2 of space, as well as the inter-linking Wrays Buildings.
The Victoria Gate Hotel has recently been brought forward as part of Hammerson’s City Quarters concept. Sitting adjacent to Victoria Gate in Leeds City Centre, it has been conceived as an additional anchor to the development.
Hammerson acquired Victoria Quarter in October 2012 for £136 mln from Kennedy Wilson acting on behalf of Bank of Ireland Private Banking.
At the time of acquisition in 2012, it was 100% let generating £7.2 mln in rent and comprised of 210,000 ft2 (19,500 m2) across 70 stores and two cafés. The acquisition price reflected a net initial yield on purchase of 5.25% at the time, property analyst Goodbody reports.
Victoria Gate was developed by Hammerson in 2016 at a cost of £164 mln. Its retail and leisure space totals 381,000 ft2, with an estimated annual rental income of £11 mln at the time of its launch in 2016 across 23 stores and seven restaurants.
Victoria Leeds comprises some 606,000 sq ft of retail and leisure space, has an 87% occupancy rate and generates £14 mln in gross passing rent spread across 84 tenants. The scheme is wholly owned by Hammerson and receives 6.38 million in annual footfall.
The disposals align with HMSO’s strategy to 'realign the portfolio to focus on prime urban estates through disposals of non-core assets, to strengthen the balance sheet, and to re-cycle capital into its core portfolio and its development pipeline'.
The proceeds will be used to reduce net debt.
