Hammerson plc Gets £101 Million From Shopping Centre Sale

Real estate investment trust Hammerson (LSE: HMSO) and Aviva Investors this morning announced the sale of the Queensgate Shopping Centre, in Peterborough. The freehold of the centre — a 50:50 joint venture between Hammerson and Aviva Investors — has been sold to Invesco Real Estate for £202 million.

The centre, which generated an annual rental income of £13 from its more than 110 stores and restaurants, is being sold at marginally below its value on Hammerson’s books as of June 2013.  Hammerson has said that it will use its share of  the proceeds of the sale, which is expected to be completed in early 2014, to invest in “higher return opportunities” in both the UK and France.

Commenting on the sale, David Atkins, Chief Executive of Hammerson, said:

This disposal brings further liquidity into the business and follows our recent successful $443m US private placement. 2014 will see major progress on our development projects and these additional funds will help us grow the business through our substantial development and refurbishment programme and selected acquisitions.

Hammerson’s share price has underperformed the FTSE for the whole of 2013. Although up over 13% by late May, it trailed the index’s 16% gain at that time. And it’s currently less than 3% up on the year, well behind the FTSE 100’s near-11% rise. But the story of the past five years is much worse — Hammerson is actually down close to 7%, whereas the FTSE 100 has increased by almost 54%.

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> Jon doesn't own shares in Hammerson.