Hammerson has acquired an additional 16.7% stake in Bullring, taking its ownership to 50%. The acquisition underlines Hammerson’s commitment to prime retail destinations and generating income growth through investment in winning sectors of the retail property market.
50:50 Joint Venture with Canada Pension Plan Investment Board (CPPIB), Hammerson has acquired Future Fund’s 33.3% stake for £307 million (approx. €365 million). Hammerson’s consideration of £153.5 million will be satisfied in cash from existing resources. Passing rents for the whole scheme are £53 million per annum and after taking into account purchase costs the net initial yield on the purchase is 5.7%.
Hammerson, as part of a joint venture with Henderson and Land Securities, originally developed Bullring in 2003, and has managed the center since opening. Hammerson will continue to have responsibility for asset management and development of the center.
Bullring is one of the UK’s top 10 retail destinations, and continues to attract leading domestic brands, expanding international retailers, and high-quality catering to Birmingham. Anchored by Selfridges and Debenhams, it is over 99% let and attracts some 40 million shoppers per annum. Since opening Bullring has demonstrated compound annual growth in ERV of 3.5% and passing rents of 5.5%.
Bullring celebrates 10 years of trading this year, during which it has consistently demonstrated impressive footfall and tenants’ sales growth. Following the successful leisure extension of Spiceal Street in 2011, there are a number of additional asset management and development opportunities to drive future growth at the center by further improving the catering, leisure and entertainment offer.
Hammerson’s existing 33.3% stake was valued at £308 million at December 2012, and the ownership of Bullring is now held by Hammerson (50%), CPPIB (16.7%) and Henderson Shopping Centre Fund (33.3%). CPPIB has a small indirect interest in Bullring through its investment in the Henderson Shopping Centre Fund. The new joint venture is the third partnership between Hammerson and CPPIB.
Source: Hammerson
