Hammerson plc has acquired for approximately €27,5 million (£20.1 million) a further 50% interest in the proposed Union Square development in Aberdeen, taking its interest in the scheme to 100%. The vendor is R & M Investments (BVI) Limited, a 50:50 joint venture between Multiplex Ltd and Aldersgate Investments.
Hammerson acquired its original 50% interest as part of the portfolio purchased in December 2002 from RT Group PLC (formerly Railtrack Group plc).
Multiplex has acted as development manager for the 50,000 m² scheme. Following this transaction, Hammerson has taken full control of the development, with Multiplex retained as project managers for the Phase I freight terminal relocation and station development works.
The proposed scheme on the nine hectare site adjacent to Aberdeen's railway station is a hybrid of a traditional mall and retail park, providing: 21,000 m² of retail units; a 16,300 m² retail terrace; 7,800 m² of leisure and catering; a 4,200 m² Cine UK multiplex cinema; 1,700 parking spaces; and a civic square. The first phase of the development is expected to begin later this year and around 40% of the scheme is pre-let or in solicitors' hands.
The estimated total development cost of the scheme is approximately £190 million and the projected net rental income is £13.7 million per annum.
John Richards, Chief Executive of Hammerson plc, said:
"Hammerson is very pleased to take total control of this exciting development opportunity. We believe there is significant potential for this type of hybrid scheme, which meets retailers' needs for large, efficient floorplates and high footfall. Union Square will be the largest scheme of its type in Scotland.
Aberdeen's economy is buoyant and this development will bring well-configured retail space to boost the city's growth."
Jayne McGivern, Chief Executive, Multiplex Developments UK Limited, said:
"This sale to Hammerson allows Multiplex to realise value generated over the past three years. We have improved the planning consent and advanced the project, thereby increasing the value of the site. However, having reviewed the letting risk, programme for delivery and timing of profit release, both Multiplex and Aldersgate concluded that Hammerson is best placed to take the scheme forward as sole owner on the basis that the early profit can be reinvested in other opportunities."