Hammerson plc has exchanged conditional contracts to sell a 75% interest in the Espace Saint Quentin shopping centre, Saint Quentin-en-Yvelines near Paris, to Allianz Real Estate GmbH. Following completion Espace Saint Quentin will be held in a 75:25 joint venture, and Hammerson will continue to manage the asset. Completion is expected to take place in October 2010.
Originally acquired by Hammerson in 1994 for 70 million, Espace Saint Quentin is part of a larger mixed-use development including residential, offices, hotel accommodation and restaurants. Anchored by Carrefour, the centre was refurbished in 1999 and an extension added. Hammerson has since added further value through restructuring and asset management programs.
Hammerson will receive proceeds from the sale of the 75% share totalling 176 million net of costs, of which 3 million is contingent upon the exercise of a purchase option by Allianz in respect of one unit in 2012. Following the sale, Hammerson's annual net income, comprising rental income and management fees, is estimated at 4.7 million. The valuation of Espace Saint Quentin at 31 December 2009 was 239 million, at which time passing rents were 14.3 million. Net income from the property in 2009 was 13.5 million.
Hammerson was advised on the transaction by Jones Lang LaSalle, Arsene Taxand and Gide Loyrette Nouel.
David Atkins, Chief Executive of Hammerson, said:"We have created significant value at Espace Saint Quentin since acquiring the asset in 1994, and we are pleased to crystallise that value to reinvest in other opportunities. We are delighted to be partnering Allianz in this new joint venture, assuming an asset management role which allows us to utilise our expertise for the benefit of both parties."
Olivier Piani, CEO of Allianz Real Estate, comments:"We are extremely pleased to announce today the acquisition of a 75% stake in Espace Saint Quentin, partnering with Hammerson, one of Europe's foremost retail asset managers. This centre is the third commercial asset to be acquired by Allianz Real Estate in Europe since the beginning of the year according to our investment strategy to further expand this asset class in our portfolio."