The property giant called Manchester an “exceptional” city
Hammerson says acquiring the stake in Arndale is in line with its plan to increase scale.(Image: Hammerson)
Major property developer Hammerson has announced a £218m deal to buy a 50% stake in the landmark Arndale shopping centre.
The London firm praised Manchester – the home of the new N10 North – as it said the asset fitted its “DNA precisely” as a dominant, city centre destination in a top European city. Arndale’s 45 million footfall makes it the highest across the group.
It is said to be Hammerson’s first major external acquisition in more than a decade and will be immediately earnings accretive at 7.8% yield. The deal – which values the centre at roughly £436m – was funded by a £225m equity fundraise and retail offer of up to 12.5% of issued share capital.
Rob Wilkinson, chief executive of Hammerson, said: “This is another important step in our strategy to increase scale through acquiring high-quality, retail-led destinations. Manchester is one of Europe’s most dynamic and fastest-growing urban economies, benefiting from strong demographics, excellent connectivity and the largest retail catchment outside London.
“Manchester Arndale sits at the heart of this exceptional city and has established itself as a premier retail destination, attracting more than 45 million visitors each year.
“Ownership of this prime asset allows us to further strengthen our position in one of the continent’s leading cities. The transaction will be immediately earnings accretive, and we see a clear path to income and value creation, leveraging Hammerson’s platform to enhance the destination and deliver attractive long-term returns for our shareholders.”
The deal comes amid the release of half year results for Hammerson showing an uptick in net rental income to £112m in the six months to the end of June, up from £80m in the same period last year. There was EPRA earnings growth of 33% to £64m, and £18.5m of headline rent, 53% above previous passing rent.
Footfall across the group’s portfolio was up 3%, ahead of national benchmarks in all territories, while like-for-like sales were up 2%.
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