Hammerson in £208m shopping centre spree

23rd Mar 2011 07:13

Property giant Hammerson has splashed out over £200m to snap up the Centrale shopping centre in Croydon plus five others as it executes its plan to invest into areas with potential.Hammerson is buying the six assets from St Martins Property Investments Limited for £208m. Hammerson's initial commitment, including transaction costs, is £221m. Passing rents on the properties are £17.2m, and after taking account of vacancy charges and other direct costs the yield on purchase price is 7.0%.The acquisition will be accretive to earnings in 2011 and will be funded from existing bank facilities, increasing gearing by around 6%.Centrale, Croydon: a 65,000m² shopping centre in Croydon's town centre, is by far the largest of the shopping centres. The others are situated in Newcastle, Rugby, Lichfield, Coventry and Folkestone."The acquisition provides Hammerson with an excellent opportunity to secure a group of good assets in strong trading locations. There is scope for Hammerson to create value through the rejuvenation of the principal assets (Centrale, Monument Mall and Elliott's Field) via development and asset management initiatives," the statement said.Separately, Hammerson has also exchanged contracts to acquire the remaining 75% of Central Retail Park in Falkirk from its partner TIAA-CREF for £69m including costs. The 37,100sq ft mall has a Tesco superstore as it key tenant and current occupancy of 98%."We have a clear strategy of selling mature assets to recycle capital into properties where we can use our skills to generate superior returns. This transaction is a rare opportunity to secure a group of good properties in strong trading locations with significant asset management potential. We believe we can rejuvenate and transform Centrale, Monument Mall [Newcastle] and Elliott's Field [Rugby], thereby improving retailer sales and increasing asset values," chief executive David Atkins added.