Commercial property giant will focus on retail
Commercial property firm Hammerson is to sell its office portfolio and concentrate on retail.
The firm will sell its existing offices “in the medium term” and invest the money in retail schemes, according to its results for the year to 31 December 2011 published this morning.
It said it has a small number of London office projects and mixed-use sites generating high returns where it will continue to invest in order to increase the value of the schemes. It may use funding or joint venture investment to reduce risk and its commitment on some projects.
Hammerson’s forthcoming office developments include Principal Place and 99 Bishopsgate. Principal Places is a 57,500m² mixed use scheme of offices, shops restaurants and residential property in east London completing in December 2015. A 26-storey office tower in the City of London, 99 Bishopsgate is ready this year.
UK offices bought in £39.1m of the group’s like-for-like net rental income in 2011 compared with £188.3m raised by its UK retail schemes, an increase of 4.6 per cent for shops but a fall of 6.8 per cent for offices.
The group’s profit before tax fell from £620.2m in 2010 to £346.3m in 2011. The group said the reduction was largely due to a much smaller rise in the porfolio’s valuation in 2011 of £186.3m compared with £447.1m in 2010.
David Atkins, chief executive of Hammerson, said: ” Following the review of our strategy we will focus on being the best owner-manager and developer of retail property within Europe. Hammerson has created a retail business delivering outperformance from prime assets in winning locations. We now intend to sell our standing office investments over the medium term to maximise returns, redeploying capital into the retail sector to exploit our expertise and build on our existing scale. This will create efficiencies that lead to further cost savings and income growth from our portfolio.”