Shopping Centre

Hammerson buys out Highcross

Published:  25 September, 2014

£180m deal to take 100 per cent ownership of Leicester scheme

Hammerson has bought the 40 per cent stake in Highross Leicester formerly owned by the Royal Mail Pernsion Scheme for £180m. And at the same time it has committed another £100m to the outlet sector. Both investments are to be funded by a share placing.

The 1.15m-sq m Highcross comprises three department stores, 114 stores and the St Peter’s Square dining quarter which features a 12-screen Cinema de Lux.The centre generates a passing rent of £27.8m and the acquisition represents a net initial yield of 5.5 per cent and an equivalent yield of 6.25per cent.

Hammerson believes the centre has strong income growth potential with the opportunity to increase occupancy through attracting new brands and upsizing key retailers. Already Hugo Boss and Urban Outfitters have been added to the fashion mix while Byron and Chimichanga have joined the catering line-up.

At the same time Hammerson has invested another £30m in outlet operator Value retail to assist with new extensions at Bicester Village and Kildare Village and for the new Value Retail village in Shanghai, which is due to open in 2015.

And Hammerson is investing £70m into VIA Outlets, a major new venture that will aim to acquire existing European outlet centres with growth potential. Alongside Hammerson, which holds a 47 per cent stake,, the other partners in VIA Outlets are Value Retail, APG and Meyer Bergman.

VIA Outlets will focus on outlets with large catchments close to major European cities with a strong tourist appeal. VIA Outlets has already acquired two assets in 2014: Batavia Stad in Amsterdamand Fashion Arena, Prague

David Atkins, Hammerson chief executive, said: “The investments we have announced today underline our commitment to winning retail sectors which will deliver continued growth and outperformance.”