Hammerson, CPPIB buy one third of Bullring mall for €364m

Hammerson, in a 50-50 joint venture with Canada Pension Plan Investment Board, has acquired a 33.3% stake in the Bullring shopping centre in Birmingham from the Australian Future Fund for £307 mln (€364 mln).

The UK REIT is investing £153.5 mln out of its own cash resources for this additional 16.7% stake in the shopping centre. The deal brings Hammerson's ownership in the mall to 50%.

The whole scheme generates annual rents of £53 mln and after taking into account purchase costs the net initial yield on the purchase is 5.7%.

The transaction generates a profit of nearly £100 mln for the Future Fund, which bought one third of the mall in 2009 from Land Securities for £210 mln, or a net yield of 6.85%.

'The acquisition underlines Hammerson’s commitment to prime retail destinations and generating income growth through investment in winning sectors of the retail property market,' the company said in a statement.

Hammerson, as part of a joint venture with Henderson and Land Securities, originally developed Bullring in 2003, and has managed the centre since opening. Hammerson will continue to have responsibility for asset management and development of the centre.

Anchored by Selfridges and Debenhams, Bullring is over 99% let and attracts some 40 million shoppers per annum. The leisure element of the scheme was extended in 2011.

Following the deal, Bullring is now held by Hammerson (50%), CPPIB (16.7%) and Henderson
Shopping Centre Fund (33.3%). CPPIB also has a small indirect interest in Bullring through its
investment in the Henderson Shopping Centre Fund. The new joint venture is the third
partnership between Hammerson and CPPIB.