Hammerson announced on Wednesday that it has gained shareholders' approval for its £825 mln (€930 mln) funding programme to help it ride out the coronavirus crisis.
The UK shopping centre operator announced last month that it planned to sell its 50% stake in VIA Outlets to Dutch pension fund APG for around £274 mln (€301 mln) as well as raise £552 mln from a rights issue, subject to shareholder approval.
The owner of London’s Brent Cross shopping centre and the Bullring in Birmingham, which like other retail groups has been battered by the pandemic, said the measures are aimed at bolstering its financial position, reducing its debt burden and providing liquidity headroom.
The disposal of the VIA Outlets stake to APG, which holds the other 50% in the JV, is conditional on the rights issue proceeding, and is expected to complete in Q4 2020. Via Outlets was formed in 2014 and comprises 11 outlet centres across Europe.
The planned rights issue had the backing of Hammerson's two largest shareholders, APG and Lighthouse Capital, which hold around 20% and 14% of the current issued share capital of the company respectively.
Last month Hammerson also revealed first-half losses before tax of £1.09 bn compared to £319.2 mln in the prior-year period.
Rental income plunged 44% to £87.3 mln in the first half of the year, while adjusted profit dropped to £17.7 mln from £107.4 mln a year earlier. At end-July, 72% of H1 rent had been collected.
Hammerson also announced plans to introduce more flexible leases and rebase rents at 'more affordable levels' after struggling to collect rent from tenants during the pandemic as they faced a sharp fall in footfall and store closures.
'The pandemic has exacerbated structural shifts in retail, exerting further pressure on both property owners and brands, and provided further evidence that the UK’s historic leasing model has served its time. It is outdated, inflexible and needs to change,' CEO David Atkins said.
'We are introducing a new UK leasing approach – one that is simpler, reflects an omni-channel retail environment and rewards positive performance on both sides. It will deliver a sustainable, growing income stream and we are in initial discussions with retailers and anticipate introducing the first of the new leases later this year.'
