Hammerson to sell 50% stake in Leicester shopping centre for £236m

Hammerson has agreed to sell its 50% stake in the Highcross shopping centre in Leicester for £236m.

The price represents a 5% discount to the December 2017 book value, allowing for capex associated with the proactive reconfiguration of the former House of Fraser store.

The deal, which takes Hammerson's total disposals this year to more than £530m, creates a new £472m joint venture with an Asian investor introduced by M&G Real Estate. Hammerson will manage the centre for the new JV.

Hammerson said the centre - anchored by John Lewis & Partners, Debenhams and a Showcase Cinema de Lux - continues to experience strong demand from retailers, with luxury perfume brand Jo Malone London recently opening its first boutique in the city.

Chief executive David Atkins said: "We have now achieved close to 90% of our increased 2018 disposal target of £600m. This latest transaction is at a price that underpins the underlying strengths of our flagship destinations. It is clear there are institutional investors that continue to have the appetite to buy into top tier centres and see value in creating joint ventures with skilled operators.

"We are taking advantage of the current valuation disconnect with equity markets using proceeds to both buy back our own shares at a significant discount to NAV and reduce leverage, whilst also continuing to selectively invest in higher growth markets. We are single-mindedly focused on shareholder value and will continue to pursue further disposal options that would allow us to achieve prices that reflect the underlying value of the asset."

The deal is expected to complete later in the year subject to EU competition clearance and JV finance.