Hammerson has confirmed its acquisition of The Junction retail park fund for £254.5m – a 7% yield.
The UK retail REIT has bought Thurrock shopping park, Essex; Forge shopping park, Telford; Imperial retail park, Bristol; Abbotsinch retail park, Glasgow; and the Oldbury shopping park development.
The four built retail parks have an average lease length of 11 years, average rents of £18 per sq ft and comprise 68% of open A1 consent space. The current annual passing rent of £18m is due to rise to £20m over five years through contracted rental uplifts.
Hammerson’s acquisition also includes 365,000 sq ft of consented development opportunities and 46 acres of additional development land.
Hammerson’s presence in the retail park market now stands at 22 assets with a total value of £1.4bn. The fund was bought at a 5% discount to valuation of £267m at 30 September 2012.
It enhances forecast earnings per share by more than 1p from 2013
Chief executive David Atkins said: “Following our investments in Value Retail, Victoria Quarter and the Whitgift Centre, this acquisition is another demonstration of Hammerson deploying capital into one of our three defined areas of retail focus. There is continued strong consumer demand for the ease and convenience of retail parks, and that consumer demand is being reflected in the increasing requirements of a range of fashion and catering retailers for space in retail parks. This portfolio acquisition on attractive terms enhances our income profile and will be actively managed to grow rents and capitalise on development opportunities, maximising returns for shareholders.”
Cushman & Wakefield, Wilkinson Williams and Morgan Stanley advised on the sale.
annabel.dixon@estatesgazette.com
