Hammerson set to dispose of half share in Grand Central to Bullring JV partner in £175m deal
RETAIL property investor Hammerson has said it remains committed to Birmingham for the long-term, especially following the massive inward investment in the city in recent years.
The group, which is half owner of the Bullring shopping centre, acquired the new Grand Central scheme above New Street Station in January.
In its full year results today, the company said it now intended to sell a half share in the shopping centre to the Canadian Pension Plan Investment Board for £175m. CPPIB is the group joint venture partner in the Bullring.
It says in the annual results statement: “The acquisition (of Grand Central) supports our long term commitment to Birmingham which is benefitting from significant inward investment.”
This is not the extent of the group’s involvement in Birmingham.
In March, it took 100% ownership of Martineau Galleries by acquiring the stakes of its two joint venture partners.
“We are considering a number of potential strategic development opportunities for the property in the medium term,” it said.
The group does not mention it in the results statement, but last week it submitted plans for a new retail park in Oldbury, which would revitalise a brownfield site on the fringe of the town centre.
Like-for-like net rental income across it UK retail parks portfolio increased by 2.6% in 2015, compared to 2.4% in 2014. The growth is due to a year-on-year increase in surrender premiums associated with proactive tenant rotation at sites in Bristol and Kirkcaldy. It said these were partly offset by vacancy costs ahead of redevelopments at the Battery Retail Park in Birmingham and a site in Swansea.
Profit for the year to December 31, 2015 was £726.8m, £27.7m up on 2014.
David Atkins, Chief Executive of Hammerson, said: “2015 was a strong year for the business, with our assets well placed to take advantage of improving consumer confidence and growing retailer demand for space in prime regional destinations, resulting in meaningful ERV growth. A clear focus on our strategic priorities has delivered strong earnings growth of 13% and supports a five-year track-record of 8% compound growth per annum.
“We continue to recycle capital into assets best positioned to deliver value creation, with the acquisition in Ireland, Grand Central and Festival Park aligned with our strategy to own and manage prime retail destinations across Europe.
“Looking ahead, whilst we recognise the global economic and political uncertainties, we remain confident that the business will continue to deliver sustainable, attractive returns.”
