Hammerson boss David Atkins is adamant that there will be no delays or hurdles in ensuring that its £3.4bn merger with Intu completes in the fourth quarter of this year.
“We are very clear on the timetable and are confident. Delay is not in our thinking,” he said.
At the top of the agenda are the shareholder votes and the CMA, both of which Atkins believes will run smoothly and on time.
“We have met with around 70% of the shareholders in the last few months. Once we get [shareholder] approval, the outstanding item is the CMA approval, which means we estimate that we will conclude Q4 of this year,” he said.
“We are engaged with the CMA and our past experience with Grand Central and the Bullring should speed up the process and we will be issuing documents to shareholders in the coming weeks in March with the aim of seeking support in April,” he added.
However, with regards to the exact date of the completion of the merger, he admitted that it could still be “enormously difficult to estimate exactly when we will conclude.”
Selling off assets that no-longer fit alongside Hammerson’s vision for “setting the benchmark for European retail destinations” remains a top priority, and Atkins is looking to sell £500m of assets this year ahead of the deal completing. In total the combined group is looking to sell £2bn of assets.
Atkins said the business is “in good shape for the disposals.” It has already completed £100m of sales in the first six weeks of the year, including the sale of the Battery retail park in Birmingham which it sold to NFU Mutual in January for £57.5m – a 6% yield.
Despite the uncertainty shrouding the retail investment market, Atkins is confident that it will reach its disposal targets on time.
“We have very much met our targets over the last three to four years,” he said. “We are focused on what we own and what we want to sell. We believe in the quality of our real estate.”
With the centres that it keeps as part of the merger there will be a greater focus on experiential aspects of retail and leisure as well as new brands.
“It is not just about cinemas and F&B anymore,” Atkins said. “For us it is about working with new and emerging brands. We are also working on putting on events and hosting ice rinks as well as expanding the digital capability in the centres.”
He added that it will also be looking to recycle cash from disposals into higher growth sectors, such as outlet centres. In its results Hammerson announced that it has taken control of more than 50% of Bicester Village, the out-of-town designer discount centre, which it jointly owns with Value Retail.
The retailer investor and developer has increased its investment in Value Retail through the acquisition of a number of direct investor interests in Villages. This included Bicester Village and La Vallée Village, Paris, for a total cost of £76m.
“Outlet shopping is one of the highest performing sectors in the real estate universe,” said Atkins. “Hammerson has a premium position in outlets and that represents 20% of our business now. We will certainly be looking to deploy capital where premium opportunities arise in this sector.”
Hammerson boosted its rental income by 6.9% to £370.4m in the year end to 31 December, giving an adjusted profit rise of 6.8% to £246.3m. The value of its portfolio was up 5.9% to £10.6bn.
The FTSE 100 retail landlord’s share price fell by more than 6% to close at 501.5p when the deal was announced in December and have now dropped to 477.2p.
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