Hammerson has exchanged unconditional contracts on the sale of a portfolio of seven retail parks to Orion European Real Estate Fund V for a headline price of €478.8m (£400m) with expected net proceeds of €472.8m (£395m). This transaction is the largest UK retail parks portfolio sale in the past decade. The sale follows Hammerson’s strategic decision, announced in July 2018, to exit the retail parks sector over the medium term to create a focused portfolio of flagship assets, premium outlets and City Quarters across major European cities.
The seven asset portfolio of UK retail parks comprise 205,000m² of space which generates a net rental income of €43m (£36m) per annum. The assets included in the portfolio transaction are:
- Central Retail Park (Falkirk)
- Cleveland Retail Park (Middlesbrough)
- Cyfarthfa Retail Park (Merthyr Tydfil)
- Elliott’s Field Shopping Park (Rugby)
- Forge Shopping Park (Telford)
- Ravenhead Retail Park (St Helens)
- The Orchard Centre (Didcot)
Separately, Parc Tawe, Swansea and Abbey Retail Park, Belfast have been sold individually generating proceeds totalling €65.8m (£55m). Combined with today’s portfolio sale of seven retail parks, this final tranche of disposals totals €544.7m (£455m) and represents a net initial yield of 8.7%, with a discount to a June 2019 book value of 22.2%.
David Atkins, Hammerson’s Chief Executive, said: “Against a challenging retail and investment backdrop we have exited the retail parks sector. Having achieved disposals of close to €1.2bn (£1bn) since the beginning of 2019, our focus remains on strengthening our balance sheet to create further resilience. The completion of this strategic disposal enables us to create a more concentrated portfolio of flagship venues, premium outlets and City Quarters which we expect will deliver greater levels of both income stability and growth over the medium term.”