Hammerson invests in retail outlets, plans major London mall

UK real estate investment trust Hammerson has announced an additional investment of £100 mln (EUR 128 mln) in its designer outlet unit, Value Retail as part of a strategy to refocus the business exclusively on the retail segment.

The Anglo-French property group, which last week announced the sale of the bulk of its office properties to Brookfield Office Properties, said it has bought a further 10% stake in the holding companies of Value Retail, bringing its stake to 22%.

'We have been seeking to increase our capital deployed in the high growth sector of premium designer outlets with our partner Value Retail. Value Retail has generated average tenants’ sales growth of 19% per annum over the last five years and we are confident of its future prospects,' commented chairman John Nelson. Hammerson's overall investment in Value Retail exceeds £400 mln, equivalent to 8% of its property portfolio.

With pro-forma liquidity of around £1 bn, Hammerson also said it will significantly invest in a new major mall on the Croydon site in London, after it has been picked as development partner for the Whitgift scheme. 'We will shortly unveil our 140,000 m² masterplan for the rejuvenation of Croydon’s entire retail core,' chairman Nelson said in a statement. The project for the Croydon site will cost £900 mln, the company said.

Hammerson posted a 6.3% rise in EPRA earnings per share to 10.2 pence in the six months ended June 30, 2012, from 9.6 pence a year before. 'Our strong income focus and strategic positioning are delivering good financial performance and dividend growth against a difficult consumer backdrop. We expect to deliver further growth to shareholders by building scale in our chosen retail sectors through extensions, developments and acquisitions,' said CEO David Atkins.

Hammerson's portfolio is now 97% retail.