GREAT RETAIL PARK SELL-OFF
13 on rack after dramatic shift in shopping habits
SHOPPING centre landlord Hammerson has put its entire estate of out-oftown retail parks up for sale as it responds to a dramatic shift in consumer spending habits.
As part of a sweeping overhaul of its faltering empire, it wants to get rid of its 13 remaining sites, having offloaded Imperial Retail Park in Bristol and Fife Central Retail Park in Kirkcaldy on Monday.
And with profits falling 80pc in the first half of the year, it mothballed plans to spend £1.4bn extending the Brent Cross shopping centre in north London.
Hammerson chief executive David Atkins said it will now focus on flagship centres, such as the Bullring in Birmingham and Victoria gate in Leeds.
Less space will be taken up by stores such as House of Fraser and Debenhams and fashion chains such as Topshop, new Look, Accessorize and Monsoon. Instead, Hammerson wants to fill the space with family-friendly plazas, leisure facilities, food markets, restaurants and smaller chains such as Bershka, Whistles and Seasalt.
The overhaul comes as traditional retailers face an onslaught from online rivals such as Amazon and Asos, and families increasingly see shopping as a day out that also involves food, drink and activities.
With the industry fighting for survival, Atkins last year announced plans to merge with Metro Centre and Trafford Centre owner Intu to create a property titan with 43 shopping centres, 37 retail parks and other outlets worth nearly £21bn.
But in a humiliating blow, he had to abandon the deal amid a backlash from shareholders who had also seen him reject a 635pashare takeover offer from French rival Klepierre that valued the company at £5bn.
Atkins will hope the shake-up announced yesterday will be enough to get investors back onside, including notorious US hedge fund Elliott Advisors which is run by billionaire Paul Singer and has a 5.3pc stake.
But with Hammerson shares nudging up 0.6pc, or 3p, to 529p the company’s value of £4.2bn is still well below what Klepierre was willing to pay.
The overhaul marks a dramatic change of direction by Atkins, who, having wanted to expand, is now proposing a huge contraction.
The 52-year- old is aiming to sell £1.1bn of property by the end of next year and increase its exposure to foreign markets by 10pc. It already has large holdings in France and the Republic of Ireland.
Hammerson is also planning to develop land around its cen- tres in Birmingham and Leeds and will hand up to £300m back to investors through a share buyback programme. The changes were announced alongside results showing Hammerson suffered an 80pc fall in first-half profits to £55.7m.
Rental income fell 3pc to £178.5m while the interim dividend was raised from 10.7p a share to 11.1p.