Hammerson inks €441m purchase of Birmingham station mall

UK REIT Hammerson has completed the purchase of Birmingham’s new Grand Central shopping centre from the city council for £335 mln (€441 mln), net initial yield of 4%.

The 40,000 m2 mall was developed by Network Rail and Birmingham City Council as part of the £750 mln redevelopment of New Street railway station. The venue opened in September 2015.

Anchor tenant is John Lewis, with a 23,000 m2 department store, while the other 40 units are occupied by retailers such as Monsoon, The White Company, Fat Face and L’Occitane.

The centre is 96% let with topped-up annual net rental income of £13.9 million, reflecting a net initial yield of 4.0%.

Hammerson said it was in advanced discussions with an existing joint venture partner about entering into a 50:50 partnership for the future ownership of Grand Central.

The company has holdings in a number of other significant retail assets in Birmingham and the West Midlands region, including the Bullring shopping centre, where it acquired a 33.3% stake with the Canada Pension Plan Investment Board in 2013. Last year it took full control of the 260,000 m2 Martineau Galleries by buying out its joint venture partners Land Securities and Standard Life.

CEO David Atkins said: ‘By deploying our expertise from Bullring, as well as other shopping centres around the UK, Hammerson is well placed to further enhance the consumer offer in Birmingham and achieve high returns through skilful management of Grand Central.’

Hammerson was advised by CBRE, while Cushman & Wakefield advised Birmingham City Council.