Shopping centre owner Hammerson will embark on a “£2bn-plus” development programme following the acquisition of rival Intu, it said today.
The £3.4bn deal will see Hammerson become Europe’s second-largest retail operator and the UK’s biggest, with a combined portfolio worth £21bn.
Speaking to investors this morning following the deal’s announcement, Hammerson chief executive David Atkins said the two businesses would sell unwanted assets in the build-up to the deal’s completion to enable the combined entity to start work on a significant new development pipeline.
Mr Atkins said the plan was to “hit the disposal programme in the short term”, which would put it in a strong position to take forward a “£2bn-plus” development pipeline once the deal was completed.
The chief executive, who will become the boss of the merged business, dismissed the notion that there was too much retail space in the UK.
He also batted back suggestions that the pipeline for the newly acquired business was largely based on extensions.
“There is a lot of retail space in the UK, not as much as other countries,” Mr Atkins said.
“I’m not taken with the argument that there’s too much retail space in the UK. Looking at the Intu pipeline, [it’s] not just expansions; there [are] brand new developments.”
Hammerson chief financial officer Timon Drakesmith, who will also remain as CFO, said the “sequencing” and “choreography” of asset sales would be crucial to ensure the combined business was ready to move with its expansion strategy.
Hammerson said it was anticipating that the takeover would be completed in the fourth quarter of next year, with the Competition and Markets Authority expected to investigate the deal.
For Intu, Sir Robert McAlpine was confirmed in August for a £150m project to refurbish its Nottingham’s Broadmarsh shopping centre.
Intu’s redevelopment of its Milton Keynes shopping centre was also given the green light in July, 18 months after the project was called in.