Picture: THINKSTOCK
Picture: THINKSTOCK

European shopping centre owner and the second-largest property company on the JSE, Hammerson, is selling billions in assets as it repositions its portfolio to maintain returns.

The company announced on Monday that it would sell two retail parks in Britain for £164m. This transaction brought Hammerson’s total proceeds from disposals in 2018 so far to £300m, CEO David Atkins said in a statement.

Atkins declined to provide further details about the disposals, saying the company would advise shareholders about its capital strategy during a financial results presentation on Tuesday for the six months to June 2017.

'Planned disposal target'

"We continue to see opportunities to dispose of selected assets in order to better deploy capital on behalf of our shareholders. With £300m of sales achieved this year, we are already over halfway to reaching our planned disposal target for 2018," he said on Monday.

"We look forward to providing a further update on disposals and capital deployment when we report our half-year results," he said.

Hammerson has been rationalising its portfolio as it tries to maintain returns for shareholders in Europe and the UK, where it is competing with online retailers and the recently formed European retail giant, Unibail-Rodamco-Westfield.

Unibail-Rodamco and Westfield merged in June to create a company that owns €61bn worth of prime retail.

The last time Hammerson reported about its performance, the company said its assets were exceeding expectations.

Atkins said in February that while smaller neighbourhood and convenience malls were suffering due to subdued consumer spending, larger shopping centres — which still make up the bulk of the company’s portfolio — were still profitable. "In recent years we have actively rebalanced the weighting of our portfolio towards high footfall destinations in major cities across the UK and Europe and this has underpinned our strong financial success at a time of ongoing structural change in retail," he said.

The group, which owns more than £7.7bn worth of retail centres in Europe, achieved its best level of lettings in its 75-year history in 2017.

Earlier this year Hammerson made an offer to take over Intu Properties, which has a portfolio that consists largely of UK retail properties. But it pulled out of this transaction after a protracted negotiation period, saying the uncertainty around the Brexit process had made the transaction too risky.

Evan Robins, a portfolio manager at Old Mutual Investment Group, said that South African fund managers had been investing more money in property companies that had no South African assets, such as Hammerson, because their prospects were far better than local stocks.

andersona@businesslive.co.za

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