Hammerson, the UK property group, has slashed almost €100m from the value of its flagship assets in Ireland, including its stake in Dundrum Town Centre, as it aims to raise net proceeds of £794m (€882m) from a share sale and asset disposal.
It said its flagship assets in Ireland were valued at £834m at the end of June, representing a 9.9pc decline in the capital return for the properties.
Hammerson owns 50pc of Dundrum Town Centre, with the other half owned by Allianz. The UK group also owns half of the Pavilions shopping centre in Swords, and the Ilac Centre in Dublin city centre. It owns 40pc of the Kildare Village premium outlet mall.
Despite slashing the value of its assets in Ireland, Hammerson told investors that the construction of 107 build-to-rent apartments beside the Dundrum shopping mall will begin next January, with a wider development project there set to be completed by 2026.
Construction at its large Dublin Central site off O'Connell Street is slated to begin in the first quarter of 2022.
Hammerson chief executive David Atkins told investors that the group's future focus will be on Ireland and the UK, as it reduces its exposure to continental Europe.
The company said yesterday that it has reached an agreement to sell almost all its 50pc stake in Via fashion outlet malls across Europe for about €301m. Via operates 11 outlets in cities including Zurich, Frankfurt, Prague and Oslo.
The stake is being sold to Via's other owner, APG Asset Management. Hammerson will retain an indirect 7.26pc stake in Via. APG also owns 20pc of Hammerson.
Hammerson is also planning to raise about £552m via a rights issue. It said the move would "significantly strengthen" the group's financial position, "reducing absolute indebtedness and providing liquidity headroom and financial flexibility".
The company saw the value of its flagship locations in Ireland fall by £88.2m in the first half of the year, with falls seen across its estate.
However, its like-for-like net rental income at its flagship Irish outlets fell 16.9pc in the first quarter, compared to a total 30.5pc decline in the UK, and a 30pc fall in France.
Provisions for arrears accounted for 11.4 percentage points of the decline in Ireland.
Hammerson chief financial officer James Lenton said that there was "very little impact" from tenant restructuring in Ireland, with such activity accounting for just 0.2 percentage points of the overall decline in net rental income here.
Hammerson's development plans for Dundrum and its €1.25bn Dublin Central project were described by chief executive David Atkins as two of the group's priority projects. The two others are in Birmingham and London.
"All four are located in thriving cities, where we expect to see significant growth," he said, describing Dublin Central as a "fantastic opportunity" for workspace, hotels and retail.
He said that Dundrum Town Centre was a model for the group's developments
Currently at Dundrum Town Centre, retail accounts for 73pc of use, with food, beverage and leisure accounting for 18pc. By 2026, following the completion of development projects, retail will comprise 43pc of space use, residential 39pc, and food, beverage and leisure just 10pc.
Mr Atkins said such city quarter developments give Hammerson a chance to "shift away from predominantly retail to a mix of uses".
"Dundrum is a great example of how that will look in practice," he added.