Wednesday 28 September 2016

Hammerson CEO upbeat on Dublin jewels

Published 10/07/2016 | 02:30

Hammerson CEO David Atkins
Hammerson CEO David Atkins
Carlton Cinema
Dundrum Town Centre
Swords Pavillions

Visitors to the Dundrum Town Centre can expect to see some welcome changes and innovations over the next six to 18 months as the south Dublin retail mecca's new owners, Hammerson and its partners, German insurers Allianz put their stamp on its already hugely-successful operations.

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New international retailers, additional high-profile food offerings and more opportunities for customers to engage with Dundrum's operations through social media and via mobile apps are just some of the things the UK real estate giant's team will be working on to enhance the centre, the ownership of which they secured last Friday morning along with several other prime assets of developer Joe O'Reilly's Chartered Land.

Also included as part of the deal which originated with Hammerson's €1.85bn purchase of the 'Project Jewel' loan portfolio from Nama last year, are 50pc stakes in Dublin's Ilac Centre and the Pavilions Shopping Centre in Swords, as well as control of a major development site extending from the former Carlton cinema on O'Connell Street to Moore Street.

Speaking to the Sunday Independent shortly after the transaction's announcement, Hammerson CEO David Atkins expressed satisfaction that a "consensual arrangement" had been reached with Joe O'Reilly to enable the handover of Chartered Land's most-prized assets without any need for litigation.

"It was always our intention to undertake a consensual arrangement. That has to be best for everyone. It's quicker, it's more certain and ultimately it's probably less costly. That was always our ambition, and I'm pleased that we've reached that conclusion," Atkins said in a conference call in which he was joined by Simon Betty, Hammerson's Director of Business Improvement.

The successful completion of the deal, coming as it does in the midst of the uncertainty thrown up by the UK's momentous decision to vote for Brexit, served to underpin international ratings agency Moody's view that Hammerson's investments in Ireland and France were a "credit positive".

Asked if Hammerson's presence in Dublin would help to soften the blow of Brexit, Atkins said: "You're right. 40pc of our assets are euro denominated so that gives us a lot of diversification particularly compared with our UK peers, so we're delighted to get this deal over the line."

Commenting on the impact Britain's potential departure from the EU might have here, he added: "Obviously the Irish economy has been performing very strongly. We think Dublin will be a net winner from the UK Brexit decision. I think building on the very strong inward investment [that] it's seen over the last few years, the fact that it's English speaking and very much has a political and business theme that is open to business [will be to its benefit]."

In terms of Brexit's potential downside for Ireland, the Hammerson chief doesn't, at this juncture, really see any.

"If one looks at the landscape around Europe, then I think the uncertainty that's been created in the UK and arguably the prospects of lower growth; we think will lead to benefits elsewhere around Europe, and I think that Dublin will be a net winner from what's happened. [For] companies looking to relocate out of London, potentially financial services, then clearly an English speaking city such as Dublin with very similar legal and financial set up would be very attractive. All I can say is the major steps Dublin has made over the last few years, particularly around inward investment and lowering of unemployment, I can only see that continuing."

Asked if the current uncertainty in the financial markets would have any impact on Hammerson's plans for Dundrum and the other assets it has acquired, he said: "We have a very near term onboarding exercise with the assets. We want to take the shopping centres forward and then [we have] a slightly more medium term aspiration in terms of development."

He added: "Chartered Land was a very good operator; arguably it had limited capital available to it over the last few years, so I would say the assets have not yet reached their full potential. So with our expertise and our capital backing, and working with our partners, Allianz, I think we can take these assets beyond where they are today. We're really relishing the opportunity."

Hammerson's director of business improvement Simon Betty is ready to hit the ground running in Dublin, with Dundrum in the first instance, and then with the company's other newly-acquired Irish assets.

He said:"We've got pretty close to the assets over the past nine months, so we know them well. In the immediate term, the focus will be on onboarding activity, ensuring that we get them on to our relevant platforms and systems. That should be a relatively quick process."

In the medium to long term, Betty said Hammerson would look to improve its Dublin assets by enhancing its customer offering and the tenant mix.

He said this would be achieved by leveraging Hammerson's relationships across Europe to bring in more international retailers and more high-profile international catering operators.

"And we'll look to deploy some of our technological solutions through the introduction of apps and social media. So over a period of six to 18 months, I think you'll see a steady progression of asset management, operational and digital operations across the portfolio," he added

Asked when Hammerson would engage with the relevant stakeholders in relation to Hammerson's plans for development on its Dublin central site, which encompasses a 1916 Rising battlefield site, Betty said the process would begin immediately.

"We're aware of the sensitivities and we're very aware of our responsibilities in terms of bringing that forward in a sympathetic yet commercially acceptable manner. In the coming weeks and months, we'll be looking to reach out and hear from all the connected parties," he said.

Hammerson CEO David Atkins confirmed Chartered Land chief Joe O'Reilly would be engaged as a development manager on the Dublin Central site, but added that this "would be the extent of his involvement".

On the development of the Dundrum Town Centre's second phase, he said: "We haven't really taken forward our thoughts, because until we had ownership, that's difficult to do. But our thinking will be still that we will bring forward a mixed-use proposal that will complement Dundrum, but equally would benefit from the great access links with the Luas. You'd expect some form of residential, some retail and potentially some offices on that site."

Asked if Hammerson might look at further Irish acquisitions, Atkins said: "We remain open-minded to other opportunities, but I think for the time being, our focus will be very much on this portfolio."

Sunday Indo Business

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