‘No regrets’ on rejecting Klépierre bid – David Atkins

Earlier today, shopping centre owner Hammerson unveiled a host of measures designed to reposition the business and reassure its investors.

Among several initiatives, it plans to embark on a £1.1bn asset disposal programme, trim its board numbers and delay its Brent Cross development.

EG spoke to chief executive David Atkins about the REIT’s new strategy.

Do you have any regrets over rejecting Klépierre’s bid?

Not at all. We have a plan here that provides higher returns for shareholders over a shorter timeframe. I am not speculating on where share prices will go, but I believe what Hammerson will be, under this new strategy, is a more highly valued business. I am confident it will provide returns to shareholders that will lead to an upwards pressure on share price.

How is the disposal strategy progressing so far? Has there been any advance on the sale of the Highcross shopping centre in Leicester that you can tell us about yet?

I can’t tell you anything about [Highcross] yet. In terms of general themes, we have sold £300m in the year to date. We continue to be encouraged by active discussions we have on a number of disposals, and that gives rise to an increased confidence.

We have increased our target [issue] from £500m to £600m, and we have created a new target for next year of £500m. So there is a high degree of confidence.

Do the disposal plans extend to Hammerson’s stake in the Croydon Partnership (the REIT’s joint venture with Unibail-Rodamco-Westfield)?

That’s not our plan. We are deferring Brent Cross for now, based on the elevated risks we have seen in the market, but are still committed to the Croydon Partnership.

We are still working on it with our partners. We couldn’t start that project today if we wanted to – there is still a lot of work to do around planning, design and preletting, and we will make that decision in due course.

What will you be doing to push through the asset sales in question, at a time when retail investor appetite seems to be waning?

We have very skilled teams. The market has been challenging for a couple of years now, and we have sold £1.1bn over the past few years and £300m [so far in 2018]. So I think we are proving we can do it.

Hammerson owns the best-quality retail assets in Europe. We are not selling core quality or secondary assets, but positive assets that people in the market for retail investments want to own. There are investors out there.

Do you think these assets will be sold at the same discount level as the Fife Central and Imperial deals?

Our overall target is to sell assets as close to book value as possible. Our two most recent retail park sales were at 10% below book value, but those were probably two of the weaker retail park assets.

We own one or two shopping centres we are looking to divest ourselves of. I would say we are pleased at the level of pricing we have on those assets, and I think we will see a range between book value and the sort of discounts achieved on those two retail parks.

Practically speaking, how will an executive board of two operate? Is it common to have two-person boards?

[Two-member boards] are the best-in-class boards set up around the world. Looking at most of the listed companies, they seem to now have a chief executive and a finance director on the board. That tends to be the preferred model for shareholders.

We are moving with the times – ensuring we have a more focused board with a higher proportion of non-executive independent directors. From an operational day-to-day point of view, we will still have a wider leadership team running the business.

Earlier this month, US activist investor Elliott Capital Advisors upped its stake in Hammerson to around 5.27%. To what extent has Elliott influenced decision making on these measures?

We have engaged with all our major shareholders over the past few months. None of them saw the strategy announced to the market today, but we have taken a vast range of views into account. We look forward now to working with those major shareholders over the coming weeks to talk through our plans in more detail.