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Bullring owner Hammerson eyes £500m sales in ‘tough’ UK market | Business News

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Hammerson, the owner of shopping centres including Birmingham’s Bullring and Brent Cross in London, is to offload more sites despite the tough commercial property market.

The FTSE 250 company used the publication of its annual results to say it was creating a committee to bolster the disposal of non-core properties – aiming to raise more than £500m this year after sales worth £570m in 2018.

Hammerson has been under intense pressure from shareholders to grow value following a dramatic fall in its share price – down over 20% in the last 12 months alone.

The company said it was “in active discussions on transactions with a total value of over £900m” but did not elaborate on the sites in question.

As Sky News reported on Sunday, Hammerson also confirmed an agreement with so-called activist investor Elliott Advisors, which holds a stake of more than 5%, following talks last week.

It had been seeking to nominate new directors for Hammerson but Sky’s City editor Mark Kleinman said the deal would involve the recruitment of two new directors who were not recommended by Elliott.

Highcross in Leicester is in Hammerson's portfolio of shopping centre sites. Pic: Hammerson
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Highcross in Leicester is in Hammerson’s portfolio of shopping centre sites. Pic: Hammerson

The statement said: “Elliott has confirmed its support for the company’s accelerated disposal programme and the company’s decision to expand the board and establish a board investment and disposals committee.

“This agreement contains certain other voting and governance terms, including a commitment that Elliott will vote in favour of the ordinary course resolutions recommended by the board at the upcoming general meeting of the company.

“Elliott has also agreed not to increase its voting interests and economic interests in the company above 10% and 15% respectively.

“This agreement will remain in force for a maximum of 12 months, subject to certain conditions.”

Shares were flat when the London Stock Exchange opened for business on Monday.

Hammerson, like rivals, has been struggling to grow value against the backdrop of Brexit uncertainty that has hit consumer spending on fashion, restaurants and experiences at a time when physical store retailers are battling online growth and higher costs from rents to wages.

Brent Cross Shopping Centre
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Brent Cross Shopping Centre is among Hammerson’s most popular destinations

Last year saw a string of failures and rescue deals that involved the closures of stores and rent reductions – hurting companies like Hammerson.

It reported a bottom line loss of £268.1m following profits of £388m in 2017 as the tougher retail environment knocked property values.

The company said the UK had dragged on its overall performance though its premium sites continued to perform strongly.

Chief executive David Atkins said: “2018 was a tough year particularly in the UK.

“Tenant failures, the structural shift in retail and a more considered consumer created a difficult operating environment, putting pressure on property values.

“Outside of the UK our destinations performed better with a strong contribution from premium outlets.

“We believe that a successful deleveraging programme will best position Hammerson for the current environment and beyond. Disposals will also enable us to prove the inherent value of this business – which we believe is not recognised in the current equity market.”

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