Hammerson still needs EC nod for two of its Dublin centre deals

The Pavilions Shopping Centre, Swords

John Mulligan Twitter Email

September 23 2016 02:30 AM

UK property giant Hammerson still requires clearance from the European Commission for its deals to acquire stakes in both the Ilac Centre and Pavilions Shopping Centre in Dublin.

And the the group has also told investors that Dundrum Town Centre - of which it owns 50pc - has the potential to generate annual rent of €93m by 2021. That's 42pc more than the rent potential it currently has.

Hammerson acquired 50pc stakes in Dundrum, the Ilac, and the Pavilions after paying €1.85bn for €2.6bn worth of loans connected to the developments.

Hammerson and German insurer Allianz acquired the so-called 'Project Jewel' loans from Nama, with all of the loans associated with developer Joe O'Reilly and his firm, Chartered Land.

While Allianz is now a joint owner in Dundrum, Hammerson also acquired the 50pc stakes in both the Ilac, and the Pavilions in Swords.

Irish Life owns the other 50pc of the Ilac. It also owns 25pc of the Pavilions, with IPUT owning another 25pc. Hammerson also secured sole ownership of a prime Dublin city centre development area, and development land beside the Pavilions.

Hammerson told investors in Dublin this week that Irish Life waived its pre-emption rights in relation to the Ilac, and that the pre-emption engagement with Irish Life and IPUT in relation to the Pavilions in Swords has now begun.

Both the Ilac and Pavilions stake acquisitions are subject to competition approval from the European Commission, it noted.

In February this year, the European Commission approved the acquisition of joint control of Dundrum Town Centre by Hammerson and Allianz.

However, submissions have not yet been made to the European Commission by Hammerson regarding its acquisition of the 50pc stakes in both the Ilac and the Pavilions in Swords. They will be made in due course, it's understood.

In its investor presentation, Hammerson said that Dundrum Town Centre is now the largest shopping centre in its portfolio, and the second-busiest, with a footfall of 18.3 million people a year.

The centre generates passing rent of just under €60m, and 76pc of leases at the centre are subject to upward-only rent reviews.

Hammerson said that recent rent reviews at Dundrum secured an average 11pc increase, which was ahead of expectations.

The biggest rent increase settled so far was made by Next, whose rent rose 18pc. House of Fraser and Marks & Spencer have each agreed to a 2pc rise.

Hammerson said it intends to "secure robust evidence of rental growth by 2019 to support [the] 2020 rent review cycle".

The company also wants to create more space for major space users at Dundrum, such as Penney's, BT2, H&M, Next and River Island, to meet demand to upsize their existing outlets.