Hammerson and Intu will collectively shed £2bn of properties from their portfolios as part of the proposed merger.
The rationale is to “strengthen its balance sheet and provide liquidity to reinvest in higher-return opportunities”.
This, in line with the merger’s overall strategy to create Europe’s leading retail destinations, suggests that the disposal strategy is most likely to focus on size of the assets as well as their catchment criteria of being in the top 20 European cities.
Many of Hammerson and Intu’s best performing centres are more than 1m sq ft, a theme which is likely to be included in the portfolio moving forwards.
Speaking to the EG, David Atkins said: “The larger assets will be what we will focus on [moving forwards],” he says. “I would say that we have a candidate list of disposals and we have done a lot of due diligence. We review all of our own fundamentals to provide an assessment for future performance and have one or two that fall below that line and those are the ones that we will dispose of.”
Neither party has confirmed any assets that will be disposed, but there are some contenders which do not fit the proposed line of strategy that investors have previously been circling.
One source close to the portfolio said: “They could look to sell one of the Intu Nottingham centres as well as Milton Keynes, which, at 430,000 sq ft, is the smaller shopping centre in the town. Intu Uxbridge could also be sold, although its ownership in the centre is small.”
Hammerson has disposed of £400m of assets this year and, in an investor seminar this morning, Atkins said that both companies have a “track record of successful disposals in the past” and that Hammerson continues to “receive a lot of unsolicited enquiries” regarding its portfolio.
The source added: “Hammerson has a pretty decent portfolio, but I would sell Didcot, which at just over 200,000 sq ft is too small and doesn’t really fit in with their portfolio. Highcross Leicester could be another contender, as they may struggle to achieve any further rental growth at that centre. Union Square in Aberdeen they could also come out of due to concerns surrounding the referendum as well as oil prices.”
In addition to its shopping centre portfolio (outlined below), Hammerson also owns seventeen retail parks, some of which could also be sold.
Although the businesses have confirmed that the majority of sales will come out of the UK portfolio, Hammerson separately announced that it had sold French shopping centre Saint Sébastien, in Nancy, to AEW Ciloger on behalf of SCPI Laffite Pierre and Actipierre Europe for a net vendor price of €162m (£143m).
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