Hammerson plc has exchanged contracts to acquire a portfolio of six assets from St. Martins Property Investments Limited for £208 million (approx. 239 million). Hammerson's initial commitment, including transaction costs, is £221 million. Passing rents on the properties are £17.2 million, and after taking account of vacancy charges and other direct costs the yield on purchase price is 7.0%.
- Centrale, Croydon: a 65,000-m² shopping center in Croydon's town center.
- Monument Mall, Newcastle: a 9,000-m² shopping mall in Northumberland Street in the center of Newcastle-upon-Tyne.
- Elliott's Field, Rugby: a 13,000-m² open A1 retail park.
- Three Spires, Lichfield: a 17,000-m² shopping mall forming the City's prime retail pitch.
- Cathedral Lanes, Coventry: a 6,000-m² shopping complex.
- Wickes, Folkestone: a 4,000-m² retail warehouse unit.
The acquisition provides Hammerson with an excellent opportunity to secure a group of good assets in strong trading locations. There is scope for Hammerson to create value through the rejuvenation of the principal assets (Centrale, Monument Mall and Elliott's Field) via development and asset management initiatives.
Centrale, purchased for £98 million, is the largest of the assets. It is situated in the heart of Croydon town center. Croydon has the 13th largest shopping population in the UK with 455,000 people. The freehold center covers 64,486 m² (694,122 ft²). It was constructed in two phases (1988 and 2004) and comprises 80 units with a 954 space car park. Tenants include Debenhams, H&M, House of Fraser and Next.
Current zone A rents at Centrale are around £130 per ft² compared to prime Croydon zone A rents of ca. £200 per ft². Average rents at the center (excluding anchor stores) are £19 per ft² compared to Hammerson's UK shopping center average of £46 per ft². There is the opportunity to create value through investment and transformation of the existing center. This will include the introduction of new retail tenants, improving circulation between floors and providing both a cinema and catering offer at the center.
Monument Mall, Newcastle
Monument Mall, purchased for £28 million, is in the center of Newcastle, with its main frontages opening onto the prime retailing pitches of Northumberland Street and Blackett Street. Newcastle has the sixth largest shopping population in the UK with 605,000 people. The freehold shopping center covers 8,823 m² (94,966 ft²) comprising 16 retail units and a food gallery over four trading levels. The complex is adjacent to Fenwick and tenants include Boots, Peacocks, TK Maxx and Wallis.
Current Zone A rents at Monument Mall are around £175 per ft², compared to prime Northumberland Street zone A rents of ca. £220 per ft². Average rents at Monument Mall are £24 per ft². The center offers restructuring potential through a comprehensive reconfiguration of existing units, exploiting the location by opening units to the street, and bringing new retailers into the scheme.
Elliott's Field Re
LXi REIT completes UK deals for €71.6m