Asian investor takes 50 per cent stake in Leicester mall
Hammerson has sold a 50 per cent stake in Highcross shopping centre in Leicester to an Asian investor introduced by M&G Real Estate for £236m. Reflecting a net initial yield of 5.5 per cent, the price shows a 5 per cent discount to the December 2017 book value, allowing for additional costs around reconfiguring the former House of Fraser store.
The 1.2m-sq ft Highcross is Leicester’s leading retail destination, attracting 18 million visitors a year and anchored by John Lewis & Partners, Debenhams and a Showcase Cinema de Lux. As at 30 June, Highcross’ occupancy was 96.7% with an annual passing rent of £26.7m.
Hammerson has recently made a significant number of improvements to the retail line-up. In 2016, the House of Fraser space was proactively taken back to accommodate an upsized flagship Zara store, which has recently opened, alongside an upsized JD Sports and additional restaurant and leisure space.
Chief Executive David Atkins said: “We have now achieved close to 90 per cent of our increased 2018 disposal target of £600m. This latest transaction is at a price that underpins the underlying strengths of our flagship destinations. It is clear there are institutional investors that continue to have the appetite to buy into top tier centres and see value in creating joint ventures with skilled operators. We will continue to pursue further disposal options that would allow us to achieve prices that reflect the underlying value of the asset.”