LONDON-Hammerson, a locally based developer REIT, said Friday during its 2011 Year-End results presentation Friday that it plans to sell off all of its $793 million office portfolio. The company said it wants to focus solely on retail properties in Europe.
In a statement Friday, the company said its current office investments will be sold in the next couple of years, with the plan to redeploy the profit to retail. David Atkins, CEO, said the office sale retail investment will create efficiencies that lead to further cost-savings and income growth. “We will focus on being the best owner-manager and developer of retail property in Europe,” he said in the statement.
According to the Year-End report, Hammerson believes the current economic uncertainty has created a slowdown in demand for office space, and rents have remained static. The company owns a handful of office buildings in the United Kingdom, such as the leasehold on 99 Bishopsgate here that it acquired for $150 million in July 2011, as well as the company’s headquarters at 10 Grosvernor St. in the West End. A few office projects in the pipeline, including the residential-office mixed-use Principal Place, will not be on the block yet, but could be sold later, according to Atkins.
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John Nelson, chairman, said the firm spent the latter part of 2011 considering the retail-only option. Retail assets already represent 89% of the firm’s portfolio. The strategy will place the company in a stronger position to exploit retail acquisition and development opportunities, Nelson said in the statement.
The firm plans to concentrate on regionally dominant shopping centers, retail parks and premium designer outlets, he said. Hammerson has typically focused on the United Kingdom and Paris, including bringing a Parisian store to 54-60 rue du Faubourg Saint Honore. Other retail companies include Centrale Shopping Centre in Croydon, Monument Mall in Newcastle and Elliott’s Field Retail Park in Rugby.
Nelson said that global macro economic uncertainty and fiscal tightening continue to have a major influence on European property markets. However, many retailers are expanding in top locations, and the company has focused on prime retail locations for purchase and development. “We believe that occupier and investment demand for retail space will be concentrated on modern, well-maintained properties in the very best locations,” he said.
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