Commenting on both transactions, John Richards, Chief Executive, Hammerson plc said: Ã¢â¬ÅThe completion of these transactions will realise total proceeds of ÃÂ£90.6 million, which will reduce the groupÃ¢â¬â¢s exposure in Germany to 5% of the portfolio on a pro forma basis. Hammerson continues to invest in the UK and France.'
City Center, Essen
Hammerson plc and Algemeen Burgerlijk Pensioenfonds (ABP) have exchanged contracts for the sale of the freehold of City Center, Essen, to CS Euroreal, a German real estate open-ended fund, for ÃÂ£80.4 million (Ã¢âÂ¬115.5 million). The net sales proceeds for HammersonÃ¢â¬â¢s 22% interest in Essen Shopping Center B.V., the freeholder of City Center, are ÃÂ£17.6 million (Ã¢âÂ¬25.2 million). Hammerson has also exchanged contracts for the sale of PHV GmbH, its wholly owned subsidiary, which operates City CenterÃ¢â¬â¢s car parks, for net proceeds of ÃÂ£1.9 million (Ã¢âÂ¬2.7 million).
It is anticipated that completion of the sale will take place by the end of 2003 and that the proceeds will be used to reduce the groupÃ¢â¬â¢s borrowings. The book value of the groupÃ¢â¬â¢s interests in City Center and the car parks, at 31 December 2002, was ÃÂ£22.1 million (Ã¢âÂ¬31.8 million). HammersonÃ¢â¬â¢s share of the net rental income from the properties was ÃÂ£1.2 million (Ã¢âÂ¬1.7 million) in 2002.
Under the terms of the contract, CS Euroreal, on completion, will retain a maximum of ÃÂ£3.6 million (Ã¢âÂ¬5.1 million) of the total purchase price of which ÃÂ£0.8 million (Ã¢âÂ¬1.1 million) relates to HammersonÃ¢â¬â¢s interest, which will be released when certain works are completed.
Hammerson was advised by Jones Lang LaSalle and CS Euroreal was advised by FPDSavills.
Hammerson has also completed the sale of Luisencenter, Darmstadt, to Difa, a German fund, the exchange of contracts for which was announced on 15 August 2003. The first payment, ÃÂ£66.4 million (Ã¢âÂ¬95.4 million), of the net sale proceeds of Ã¢âÂ¬102.2 million, has now been received. The balance of ÃÂ£4.7 million (Ã¢âÂ¬6.8 million) is expected following HammersonÃ¢â¬â¢s completion of outstanding conditions. Hammerson has provided a rental guarantee in respect of the letting of vacant space amounting to a maximum of ÃÂ£0.4 million (Ã¢âÂ¬0.6 million) per annum for five years.