London (Parliament Politics Magazine) – Hammerson has sold its 40% stake in Value Retail, which owns Bicester Village, to L Catterton for £1.5bn. The sale will raise £600m for Hammerson’s debt repayment and shareholder returns.
How will Hammerson use the £600m from the sale?
The property company Hammerson has marketed its stake in the group that owns Bicester Village, the cut-price designer goods shopping base in Oxfordshire, to the luxury market investor L Catterton in a £1.5bn deal.
Hammerson stated it would raise £600m in cash profits from the sale of its near-40% stake in Value Retail, which also holds nine luxury shopping destinations near Barcelona, Brussels, Dublin, Frankfurt, Paris, Madrid, Milan and Munich. The property company intends to use the cash to pay down debt, invest in its other camps and return £140m to shareholders.
What does L Catterton see in Value Retail’s portfolio?
L Catterton, a private equity business part-owned by the Louis Vuitton and Christian Dior owner LVMH, stated: “With its high-quality portfolio, reputation for luxury and commitment to delivering a distinctive experience to customers, Value Retail is well positioned for growth and continued success.”
How will the sale impact Hammerson’s portfolio and strategy?
Rita-Rose Gagné, the chief executive of Hammerson, which holds a string of shopping centres including Birmingham’s Bull Ring and Cabot Circus in Bristol, stated: “This is a transformational deal for Hammerson, generating cash proceeds of [about] £600m whilst removing an overweight, low-yielding and minority stake, and positioning us for accelerated growth and value creation.”
She stated the deal helped to concentrate Hammerson’s portfolio on “prime urban real estate” and to focus on “higher-yielding opportunities with more substantial returns, whilst improving returns to shareholders”.
How does the sale fit into Hammerson’s asset restructuring?
The sale marks Hammerson’s most delinquent disposal as it attempts to reinvigorate its portfolio amid rapidly transforming shopping habits. Gagné has sold off assets to concentrate investment on Hammerson’s urban shopping centres where it is repurposing duplicative department store rooms into a mix of food, leisure, services, shopping and residential outcomes.
Visitor numbers at shopping centres have come under stress as a string of department stores have shut, including the failure of Debenhams and Beales and closures by House of Fraser, John Lewis and Marks & Spencer. Shopping camps are also facing heavy contests from online retailers and smaller, outdoor retail parks.
Hammerson marketed its 50% stake in its Croydon shopping centre redevelopment cooperative venture to its associate Unibail-Rodamco-Westfield at the end of April. Last year it pledged its stake in the Parisian shopping centre Italie Deux and an adjoining site to the owner of Ikea.