5th Oct 2018 16:36
LONDON (Alliance News) - Property developer Hammerson PLC said Friday it has agreed to sell its 50% stake in the Highcross shopping centre in Leicester for GBP236 million, reflecting a net initial yield of 5.5%.
The deal with also create a GBP472 million joint venture with an Asian investor introduced by M&G Real Estate, within which Hammerson will manage the centre.
The 110,000 square metre centre Highcross, at June 30, had an occupancy of 96.7% with an annual passing rent of GBP26.7 million.
The acquisition is expected to be completed later in 2018, subject to EU competition clearance and joint venture funding.
"We have now achieved close to 90% of our increased 2018 disposal target of GBP600 million. This latest transaction is at a price that underpins the underlying strengths of our flagship destinations. It is clear there are institutional investors that continue to have the appetite to buy into top tier centres and see value in creating joint ventures with skilled operators," said Chief Executive David Atkins.
"We are taking advantage of the current valuation disconnect with equity markets using proceeds to both buy back our own shares at a significant discount to net asset value and reduce leverage, whilst also continuing to selectively invest in higher growth markets," Atkins added.
Shares in Hammerson closed up 2.8% at 442.40 in London, while Johannesburg shares closed up 2.7% at ZAR85.85 on Friday.
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