Hammerson exits offices for shopping centres

Aaron Morby 12 years ago
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Developer Hammerson is exiting the office building market to concentrate on shopping centres.

The firm revealed today that it planned to sell office investments over the next few years to plough returns into shopping centres.

It decision means that the £290m Principal Place will be the last office and residential for the foreseeable future

The Bishopsgate mixed-use scheme had to be put hold at the start of the year after a tenant pulled out, stalling the bid race between Sir Robert McAlpine and Skanska.

Hammerson has now scheduled the project to start at the end of 2012.

David Atkins, Chief Executive of Hammerson, said: “Following the review of our strategy we will focus on being the best owner-manager and developer of retail property within Europe.

“Hammerson has created a retail business delivering outperformance from prime assets in winning locations.

“We now intend to sell our standing office investments over the medium term to maximise returns, redeploying capital into the retail sector to exploit our expertise and build on our existing scale.

“This will create efficiencies that lead to further cost savings and income growth from our portfolio.”

He added that the current economic uncertainty had slowed demand for office space, and rents had remained flat over the year.

Although he said there were a significant number of large occupiers in old buildings with leases coming up for renewal that may support rental levels in new buildings over the medium term.

Hammerson also outlined its revised development pipeline with around £1bn targeted for retail expansion and improvements.

    Development pipeline

    Major projects
    2013 starts
    £550m Eastgate Quarters, Leeds. 92,900 sq m
    £285m Sevenstone, Sheffield. 60,500 sq m

    Extensions and refurbs
    2012 starts
    £15m Monument Mall, Newcastle. 9,800 sq m
    £21m Manor Walks, Cramlington. 13,500 sq m
    £12m Ravenhead, St Helens. 5,700 sq m
    2013 starts
    £90m Centrale, Croydon. 66,800 sq m
    £10m Silverburn, Glasgow. 10,400 sq m
    £27m Elliott’s Field, Rugby. 11,200 sq m
    £60m The Orchard Centre, Didcot. 23,500 sq m
    £26m Parc Tawe, Swansea. 25,800 sq m

    London office
    Started
    £14m 99 Bishopsgate, London EC2. 12,100 sq m

    Start December 2012
    Principal Place, London EC2 -office and residential. 57,500 sq m

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