Shopping centre owner Hammerson has exchanged contracts on the sale of St Oswald’s Retail Park in Gloucester, UK, to a local authority for £54 mln (€63 mln).
The sale price reflects a net initial yield of 8.5%, and is 8% below the 30 June 2019 book value, the firm announced.
Hammerson is under pressure to divest in order to reverse plunging returns, as it navigates tough times for the retail sector, with its tenants being squeezed by changing consumer habits and the rise of online shopping.
The 20,900 m2 property, which is located to the north of Gloucester city centre, offers a range of bulky goods, retail and leisure space over two terraces. Flagship tenants include Homesense, B&Q and Wren Kitchens.
The buyer is reportedly Glouscester City Council.
Hammerson originally developed the site in 2005, and has since increased the overall number of units on the park to improve the brand mix.
Following this transaction, Hammerson has achieved £577 mln of disposals in 2019, exceeding its minimum disposal target, of in excess of £500 mln, for the financial year. This includes the sale of a major stake in its Italie Deux flagship destination in Paris for £423 mln, announced in July, as well as additional retail park disposals.
David Atkins, Hammerson chief executive, said: ‘Despite a challenging investment market, we are successfully executing disposals in line with our priority to reduce debt and strengthen our balance sheet. These transactions also give us the flexibility to capitalise on the opportunities we see in the market, particularly with regards to our City Quarters pipeline, which is core to the future direction and success of our business.’
