PARIS-UK REIT Hammerson has agreed to sell a 51% stake in the O'Parinor shopping center, its largest asset, to the National Pension Service of Korea. It will receive net proceeds of $274 million, and also agreed to sell a further 24% stake to NPS in 2011 for an expected net $134 million.
NPS is the fifth largest pension fund in the world and has invested heavily in European property over the past year to diversify its asset portfolio. "This transaction is in line with our strategy of investing in high quality global real estate," said Hee Seok Kim, head of global investment at NPS. In May it bought Berlin’s Sony Center for close to $758 million, after acquiring HSBC's headquarters in London's Canary Wharf. It also owns part of London Gatwick airport.
O'Parinor centre was valued at $546 million in June. It was originally acquired by Hammerson in 2002 for $190 million but the total cost rose to $346 million after a 258,000-square-foot extension and renovation in 2008. This boosted the size to 968,000 square feet.
O'Parinor comprises 220 stores, including major retailers such as Carrefour, H&M and Zara outlets, with an occupancy rate of 96.4%. Hammerson said the disposal will allow it to release capital for investment opportunities in the UK and France which offer superior returns, and will reduce exposure to its single largest asset.
Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.
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