The owner of the Bullring shopping centre in Birmingham has raised close to £400m as part of a plan to buy up designer outlets across Europe in a joint venture with the owner of Bicester Village.
Hammerson, which owns 43 shopping centres and retail parks including Brent Cross in north London and Cabot Circus in Bristol, has raised £399.3m by placing more than 70 million shares to fund the spending spree. The new shares, placed at 560p, are just under 10 per cent of the company.
Part of the cash will be spent on investing in a new joint venture with Bicester Village owner Value Retail. Hammerson and Value Retail, with Dutch pension fund APG and property investor Meyer Bergman, have created VIA Outlet Fund in which Hammerson takes a 47 per cent stake.
Hammerson will invest £70m into the fund which already owns Batavia Stad in Amsterdam and Fashion Arena in Prague and it will now buy further schemes across Europe.
Another £30m will be pumped into Value Retail, in which Hammerson already holds a stake, to help fund extensions at Bicester Village in Oxfordshire and Kildare Village in Ireland and its new outlet in Shanghai, which is due to open next year. US shopping mall giant Simon Property Group also owns a stake in Value Retail.
The deal pits Value Retail against major European rival McArthurGlen which operates 20 designer outlets across eight countries in Europe.
The designer outlet sector is fast growing in Europe, boosted by demand from tourists such as Chinese shoppers looking for a luxury bargain.
David Atkins, chief executive of Hammerson, said: “This placing enables us to accelerate our focus on experience, convenience and luxury, the three key areas underpinning our successful retail locations. The new investment into VIA Outlets and Value Retail will build on our knowledge of this exciting sector and gives us access to opportunities in new markets.”
The rest of the cash will be spent on its pipeline of developments as well as buying the remaining 40 per cent of Highcross shopping centre in Leicester that it doesn’t already own for £180m.
Deutsche Bank and JP Morgan are joint bookrunners on the placing and Lazard & Co are financial advisers.Reuse content