Thursday 16 August 2018

Hammerson's Irish assets worth €1.25bn on retail revival

The Dundrum Town Centre in Dublin attracts more than 17 million shoppers a year
The Dundrum Town Centre in Dublin attracts more than 17 million shoppers a year
John Mulligan

John Mulligan

Ireland delivered a strong leasing performance during the first three months of the year for Dundum Town Centre co-owner Hammerson, as retail sales continue to rise in a surging economy.

It also said its Irish portfolio of assets was valued at £1.096bn (€1.25bn) at the end of March - up 1.2pc since the end of December.

Hammerson owns 50pc of Dundrum along with German insurer Allianz. The FTSE-100 company also owns 50pc of the Pavilions shopping centre in the north Dublin suburb of Swords, and half of the Ilac Centre in the capital.

The UK group said that the Pavilions also had an "impressive start" to the year, luring Australian crafts chain Smiggle and River Island upgrading its store to a flagship premises.

Hammerson also owns 41pc of the Kildare Village outlet mall - a stake that isn't included in its Irish asset valuation figure. It's also planning a major development called the Dublin Central scheme.

That six-acre site stretches from Upper O'Connell Street to Parnell Street, and Moore Street and Henry Street. Hammerson has described it as an "outstanding European city centre development site".

"Our strategy and the positioning of our portfolio continue to deliver a strong operational performance," said CEO David Atkins.

"Our attractive high-growth markets of premium outlets and Ireland are driving valuation growth and we are on track with our disposal programme."

Hammerson also said that it will not finalise a £3.4bn (€3.9bn) plan to buy rival Intu until it has more clarity regarding a £4.9bn (€5.6bn) approach for Hammerson from French firm Klepierre.

Hammerson said Klepierre's position is currently "unclear" and noted that the French company has until April 16 under takeover rules to make a formal offer.

"We have not heard back from them (Klepierre), nothing really to engage with, but they certainly know where we are," David Atkins said yesterday.

Klepierre tabled its indicative offer last month, but it was rejected by Hammerson's board.

Yesterday, Hammerson said that its own portfolio of retail outlets, which includes premises in France, was £10.6bn (€12.1bn). That was 0.3pc higher compared with the end of December, with the valuation of Dundrum helping to lift the figure.

"By producing a Q1 valuation, Hammerson is clearly trying to force Klepierre into improving on its initial approach at 615 pence (a share)," according to analysts at Exane.

Hammerson's combination with UK-based Intu would form a group that will also have sites in Ireland, France and Spain. Intu's properties include the Metrocentre in Gateshead, Europe's largest covered shopping and leisure centre.

Klepierre owns more than 100 shopping centres across 16 countries, but does not own any properties in either Ireland or the UK.

Dundrum Town Centre, where upmarket food retailer Fallon & Byrne is set to open an outlet soon, is one of Hammerson's single biggest assets.

The 123,800 sq m centre is 99pc occupied and generates total passing rent of around €66m a year.

Hammerson acquired its stakes in the Dundrum Town Centre, the Ilac, and the Pavilions after paying Nama €1.85bn in 2015 for €2.6bn worth of loans connected to the developments.

Irish Independent

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