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Business

Hammerson exits UK retail parks sector with $459 million assets sale to Brookfield

Hammerson exits UK retail parks sector with $459 million assets sale to Brookfield

(Reuters) – Hammerson said on Wednesday it sold seven retail parks to Canadian private-equity firm Brookfield Asset Management for 330 million pounds ($459.33 million), marking the mall operator’s exit from the UK retail parks sector.

British shopping centres are set to be fully operational by mid-May under phased exit plan from coronavirus restrictions, which have kept shoppers at home and led to widespread retail rent deferrals.

The divestment will help Hammerson shore up its finances after the UK-headquartered company reported a loss of 1.7 billion pounds for 2020 and issued a longer-term debt warning, as the coronavirus crisis knocked the value of its malls.

“Our immediate priority is to strengthen the balance sheet. This latest disposal is a positive step,” Chief Executive Rita-Rose Gagné said.

The transaction represents an 8% discount to the assets’ book value, as of Dec. 31, and takes the total gross proceeds of the company’s disposals in 2021 to 403 million pounds, Hammerson said.

Retail parks have been relatively resilient during the COVID-19 pandemic, partly because essential retailers were allowed to operate during the lockdown from these parks that also provide for drive-in and open-air shopping experiences.

Retail landlords are expecting the retail recovery to lag the broader British economy, given it was struggling with a shift to online shopping and high costs even before the pandemic.

Shares of Hammerson hit session highs after the announcement, and were up 2% at 37 pence by 1240 GMT.

($1 = 0.7184 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru, Editing by Sherry Jacob-Phillips)

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