Hammerson: "Sale of London Office Assets"

"Hammerson is pleased to announce that it has exchanged contracts for the sale of the majority of its office portfolio to Brookfield Office Properties for aggregate cash proceeds of £518 million.

"... The proceeds will be used to increase scale and focus through investment in retail developments and acquisitions in Hammerson’s three chosen areas:

• Prime regional shopping centres. Hammerson is on site at Les Terrasses du Port, Marseille, a £400 million retail and leisure scheme which is on track to open in spring 2014, and is refurbishing Queensgate, Peterborough. Hammerson is making good progress with a number of its other major retail schemes in both the UK and France.

• Convenient retail parks. Hammerson plans to accelerate extension and refurbishment projects in its UK retail parks and smaller retail schemes. Hammerson has identified projects worth £320 million which show an average yield on cost in excess of 7.5%, and has recently commenced construction at Monument Mall, Newcastle, and Manor Walks, Cramlington.

• Premium designer outlets. Hammerson has an investment in the highly successful Value Retail business which owns premier outlet villages in nine of Europe’s main cities. Having secured an additional stake in December 2011, Hammerson retains a close dialogue with the management team and believes there will be opportunities for further future investment.

"David Atkins, Chief Executive of Hammerson said:

“In our strategic review announced earlier this year we identified the opportunity to enhance returns by focusing our energy and capital on the successful sectors of retail which cater to consumers’ increasing desire for experience, convenience and value. [sic]

I’m delighted that we have been able to achieve our goal of becoming a pure retail business earlier than anticipated by arranging a single transaction for the majority of our London offices which secures excellent value for shareholders.

I am confident that at this point in the cycle we can reinvest successfully to increase scale in our three chosen areas of prime shopping centres, convenient retail parks and premium designer outlets.”