Hammerson expands retail park portfolio through Junction Fund deal

UK REIT Hammerson has expanded its retail park business in the UK through the acquisition of the Junction Fund. The deal gives Hammerson four retail parks and additional development land for an investment of £254.5 mln (EUR 313 mln).

The price reflects a 5% discount to fund valuation of £267 mln at end-September 2012, and a yield of 7%. The vendor was the fund's property and asset manager Capital & Regional, which acted on behalf of the investors in the fund.

Hammerson now owns 22 retail parks with a total value of £1.4 bn.

London-listed Capital & Regional held a 13.4% stake in the fund and its share of the acquisition price comes to £34.85 mln. The company will cease its management role for the fund following the sale.

The Junction Fund is a specialist retail park fund, owning four retail parks with extra development potential and two separate development sites. The main assets are Thurrock Shopping Park, Lakeside; Forge Shopping Park, Telford; Imperial Retail Park, Bristol and Abbotsinch Retail Park, Glasgow.

Hammerson CEO David Atkins said, 'Following our investments in Value Retail, Victoria Quarter and the Whitgift Centre, this acquisition is another demonstration of Hammerson deploying capital into one of our three defined areas of retail focus. There is continued strong consumer demand for the ease and convenience of retail parks, and that consumer demand is being reflected in the increasing requirements of a range of fashion and catering retailers for space in retail parks.

'This portfolio acquisition on attractive terms enhances our income profile and will be actively managed to grow rents and capitalise on development opportunities, maximising returns for shareholders.'

Morgan Stanley acted as financial advisor, and Cushman & Wakefield and Wilkinson Williams acted as property advisors to the Junction Fund investors.