Hammerson grows outlet business
Published: 23 November, 2016
Funding in place for growth as outlets JV buys four more schemes
VIA Outlets, the European outlets business 47 per cent owned by Hammerson alongside APG, Meyer Bergman and Value Retail, has bought four established outlet centres in Germany, Portugal, Spain and Poland for €587m.
The deal reflects a blended net initial yield of 5.5 per cent.and takes the total size of the VIA Outlets portfolio to €1.1bn across 10 assets.
Timon Drakesmith, CFO of Hammerson and Chairman of VIA Outlets’ advisory committee, said: “This is a rare opportunity to acquire strong outlet centres in an off-market transaction. Well-positioned European outlets continue to deliver strong sales growth supported by an improving customer offer and increasing tourist numbers across Europe.”
The largest of the four – at 29,000 sq m with 114 tenants – is in Zweibrücken, on the border between France, Germany and Luxembourg Germany. Tenants including Versace, Michael Kors, Polo Ralph Lauren, Tommy Hilfiger and Esprit generate ales densities of €6,000 per sq m and annual footfall is 3.8m.
Located close to Porto, Portugal, the 28,000-sq m outlet in Vila Do Conde has 129 tenants including Polo Ralph Lauren, Michael Kors and Carolina Herrera with average sales density of €4,000 per sq m.
The outlet in Spain is located north east of Seville, with 16,400 sq m across 65 retail units including Tommy Hilfiger, Mango, Polo Ralph Lauren and Adidas. Sales densities are €3,600 per sq m and annual footfall is 2.0m. And the 15,800-sq m outlet in Wroclaw, Poland has 87 units including Nike, Tommy Hilfiger, Adidas, Guess and Calzedonia. Sales density is €3,300 per sq m and annual footfall is 2.8m.
The deal comes as Hammerson raised £400m in a private placement with 11 institutional investors from both the US and the UK to repay short term bank facilities used for recent acquisitions in Dublin and Birmingham.
CFO Timon Drakesmith said: "This financing locks in long-dated funding at all-time low interest rates. We believe this is the largest ever private placement for a UK property company."