Hammerson in disposals spree; reaches deal with investor Elliott

Troubled UK shopping centre operator Hammerson said it was looking to sell at least £500m in assets to cut debt as it struck a deal with activist shareholder Elliott Advisors.

Releasing full year results, the company added it was in talks on disposals with a total value of more than £900m.

Net rental income fell 6.2% to £347.5m as company failures hit occupancy. Debt was cut by £179m to £3.4bn with a target of £3bn for 2019.

Hedge fund Elliott said it would vote in favour of the resolutions recommended by Hammerson at its upcoming general meeting.

It also agreed not to increase its voting and economic interests in the company above 10% and 15% respectively. The deal is expected to remain in force for a maximum of 12 months.

Hammerson said it was appointing two new non-executive directors and decided to establish an Investment and disposal committee.

Chief executive David Atkins described 2018 as “a tough year, particularly in the UK”.

“Tenant failures, the structural shift in retail and a more considered consumer created a difficult operating environment, putting pressure on property values. Outside of the UK our destinations performed better with a strong contribution from premium outlets,” he said.

"We believe that a successful deleveraging programme will best position Hammerson for the current environment and beyond. Disposals will also enable us to prove the inherent value of this business - which we believe is not recognised in the current equity market.”

Elliott said it welcomed the boardroom changes and disposal plans.

“This increased focus on strategic disposals, as marked by updated targets for 2019 and a current pipeline of potential sales of over £900m, signals a positive development in the company's progress, and its ability to ensure that its portfolio of high quality assets delivers compelling value for all shareholders,” it said in a statement.