Johannesburg - Hammerson has signed an agreement with its partners in VIA Outlets to acquire four established outlet centres in major cities in Germany, Portugal, Spain and Poland as part of its growth strategy in the European outlet market.
The FTSE 100 UK retail real estate investment trust, which has a secondary inward listing of all its shares on the main board of the JSE, said yesterday that the retail venues represented a total asset value of €587 million (R9 billion).
It added the transaction took the total size of the VIA Outlets portfolio to €1.1bn across 10 assets and delivered critical mass to this successful European outlets venture.
The transaction agreement was signed with its VIA Outlets partners APG, Meyer Bergman and Value Retail.
Hammerson has a 47 percent interest in VIA Outlets, taking into account centre-level debt financing, its share of the acquisition funding will amount to €170m. The acquisition will increase its exposure to the growing European outlet market to about 17 percent of its gross asset value.
Quality retail
When it listed on the JSE in September, Hammerson had a £9bn (R159bn) portfolio of quality retail and leisure destinations predominantly located in the UK, France and Ireland, with its portfolio comprising more than 41 shopping centres and retail parks and a platform of 15 premium outlets in the UK and around Europe.
Timon Drakesmith, the chief financial officer and managing director of Premium Outlets at Hammerson and chairman of the advisory committee of VIA Outlets, said the transaction provided a rare opportunity to acquire strong outlet centres in an off-market transaction.
Drakesmith said well positioned European outlets continued to deliver strong sales growth, supported by an improving customer offer and increasing tourist numbers across Europe.
“Our active capital recycling programme is tilting Hammerson’s portfolio towards faster growth end-markets to reinforce our consistent earnings growth profile,” he said.
Hammerson said the transaction was accretive to its forecast earnings a share and net asset value a share, adding its planned £500m disposal programme was on track with £435m already completed.
Further disposals had been identified for next year, it said.
The transaction to acquire the four outlet centres is still subject to regulatory clearance.
The largest outlet to be acquired is in Zweibrucken in Germany on the border between France, Germany and Luxembourg and connected by main arterial roads. The 29 000 square metre centre has 114 tenants, was Germany’s first established retail outlet and has the highest sales density across the VIA Outlets portfolio at €6 000/m² and an annual footfall of 3.8 million.
Located close to Porto in Portugal, the 28 000m² outlet in Vila Do Conde has 129 tenants, an annual footfall of 4.3 million and average sales density of €4 000/m² plus further adjacent development land on the acquired site.
The 16 400m² outlet in Spain is located north-east of Seville, has 65 retail units, a sales density of €3 600/m² and annual footfall of 2 million.
The outlet in Wroclaw in Poland is the only retail outlet in western Poland and includes 15 800m² of retail space and 87 units. It has a sales density of €3 300/m² and annual footfall of 2.8 million.
Hammerson shares closed 0.23 percent down on the JSE yesterday at R96.75.
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