Major Bullring repositioning project fuels £11m revaluation gain
The Bullring experienced the strongest growth at 5% out of Hammerson’s portfolio last year, after being boosted by a £17m repositioning of the former Debenhams store.
A revaluation gain of £11m has been secured by the asset, whilst the rest of Hammerson’s UK flagship destinations reported a deficit of £22m.
Additions such as M&S and TOCA Social to the Debenhams space, as well as deals with Bershka, NIKE, JD Sports, Footlocker, and Pull and Bear drove record lease agreements, with 23 permanent deals signed at the asset with rent 9% above estimated rental values.
Hammerson says this leasing performance has been underpinned by high footfall, deman and growing leasing tension that would not have been achieved without investment. It outlines its commitment to repurpose obsolete or underutilised space; selecting the right brand partners to enhance the mix; investment in the public realm and investment in leasing, asset management, placemaking and marketing talent.
The reposition project of the Debenhams space – which represents 15% of the total floorspace of the Bullring, is expected to deliver a high double digit internal rate of return and put a “positive halo” on the performance and presentation of the asset and rental demand and values, which it hope to further capitalise on with future lettings.
Hammerson says this leasing performance has been underpinned by high footfall, demand and growing leasing tension that would not have been achieved without investment. It outlines its commitment to repurpose obsolete or under-utilised space; selecting the right brand partners to enhance the mix; investment in the public realm and investment in leasing, asset management, placemaking and marketing talent.
Rita-Rose Gagné, Chief Executive of Hammerson, said: “Our city centre destinations are in high demand. This year we delivered a positive performance across our key strategic, operational and financial metrics.
“Over the last three years, we have delivered against all strategic milestones. We now have a core portfolio focused on urban locations which are evolving into my vision: vibrant, 24/7 multi-use estates. These destinations are fast growing, and part of the fabric and infrastructure of the cities in which we operate.
“Whilst our eyes are open to the current macro-economic environment, our occupiers are thriving and our visitor numbers are on the rise in our realigned portfolio. We are reaping the rewards of the investments we are making in our core portfolio alongside best-in-class occupiers, which underpins the high levels of demand for our space. We expect this trajectory to continue in the year ahead.
“We have a strong pipeline of leasing and repurposing opportunities. There is still more for us to do, but we are now entering a time where having the capability to invest and operate with discipline and conviction will be rewarded”.
