Sunday 19 November 2017

Hammerson raises €500m to refinance debt used for Dundrum centre deal

Dublin’s Dundrum Town Centre
Dublin’s Dundrum Town Centre
Peter Flanagan

Peter Flanagan

Property firm Hammerson has raised €500m on the bond market as it looks to refinance debt it used to pay for the loans tied to Dundrum Town Centre and other properties.

Hammerson teamed up with Allianz Real Estate to buy the Project Jewell loan portfolio last year. To finance its share of the deal, Hammerson secured a short term bridging loan from nine lenders in October.

Markets had expected Hammerson to refinance at least part of that facility with a bond, and so it proved.

In a stock exchange announcement last night, the company said it raised €500m from the bond at a coupon - or interest rate - of 1.75pc.

"The issue was significantly oversubscribed and placed with investors from UK, France, Germany, Belgium and 15 other European countries. The proceeds of the issue will be used to part refinance bank facilities raised for the recent investments in Dublin and Birmingham.

"Following this new issue the overall loan to value ratio of the group will remain in line with our previously stated guidelines," the company said.

Hammerson chief financial officer Timon Drakesmith said: "We were encouraged with the participation of our euro fixed income investor base and, having issued a £350m bond last year, it was pleasing to accommodate demand for a euro issue.

"This long-term finance fixes low rates of interest and supports the investment returns from our recent acquisitions."

The deal sees Hammerson take advantage of the low interest rate environment and so will be a much better long-term bet than the bridging loan it secured last October. Barclays, Deutsche Bank, JP Morgan, MUFG, BNP Paribas, HSBC, Lloyds Bank, The Royal Bank of Scotland and Santander acted as joint bookrunners on the deal.

Hammerson is in talks to take control of the Dundrum Town Centre from its developer, Chartered Land. Those talks are still ongoing but Hammerson is thought to remain on track to take control of the centre as well as related properties, the Ilac Centre and Pavillions in Swords, by this summer.

Hammerson is also using the bond to cover the cost of the Grand Central Shopping Centre in Birmingham, which it bought for €450m.

Dundrum is not the only major centre which could fetch more than €1bn. Green Property is seeking that amount for the Blanchardstown Centre in west Dublin. That deal is expected to completed by the end of this summer as well with significant international interest in it.

Irish Independent

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