Hammerson signs JV with CPPIB for flagship UK mall

UK REIT Hammerson has signed a 50:50 joint venture partnership with Canadian Pension Plan Investment Board (CPPIB) for the ownership of Birmingham’s Grand Central shopping centre.

Hammerson announced last month that it had purchased the mall for £335 mln (€441 mln) from the city council. The project was part of the £750 mln redevelopment of Birmingham’s New Street railway station undertaken by the council and Network Rail.

The partnership strengthens Hammerson and CPPIB’s presence in Birmingham following their joint acquisition of a 33.3% stake in the city’s Bullring shopping centre in 2013.

The centre is 96% let with topped-up annual net rental income of £13.9 mln, reflecting a net initial yield of 4%. The anchor tenant is John Lewis with a 23,000 m2 department store, while the other 40 units are occupied by retailers including Monsoon, The White Company, Fat Face and L’Occitane.

Hammerson said the joint venture pricing terms were equivalent to the terms for its acquisition of the shopping centre and were subject to regulatory approval. Hammerson’s total acquisition costs amount to £175 mln.