Hammerson, the JSE-listed owner of malls in the UK and Europe, says it has completed the sale of a 75% stake in one of its French assets as it looks to restructure its balance sheet and decrease debt.
The group sold the stake in its Parisian shopping mall for €430m (R7bn), with the proceeds to be used to strengthen its balance sheet.
Post the 75% sale of Italie Deux, the net debt will be reduced to £3.1bn and headline LTV will be 37%. Fund managers generally prefer companies to have a loan-to-value of 30%-40%.
The London-based company, with other JSE-listed, UK-focused landlords, including Capital & Counties and Intu, has been under pressure because Britain voted to leave the EU in 2016.
Online shopping has also caused some bricks and mortar stores to lose business.
Hammerson, which listed on the JSE in 2016 and counts Coronation Fund Managers as a big investor, has been trying to divest from the UK and to invest more in European assets.
Commercial property valuations have come under pressure because of the uncertainty about the Brexit process.
In November Hammerson had exchanged contracts on the sale of St Oswald’s Retail Park in Gloucester to a local authority for £54m (about R1bn).
The shopping complex, Italie Deux, is located on the left bank of Paris and provides a mix of retail, leisure and cultural space, Hammerson said on Thursday.
The transaction represented a net initial yield of 4.1% on Italie Deux, the company said.
The total sales price reflects an 8.5% discount to December 2018 book value and is marginally below the end-June 2019 book value.
Hammerson’s share price was unchanged at R56.86 on Thursday morning, having fallen 6.51% so far in 2019.
The company has its primary listing on the London Stock Exchange and a secondary inward listing on the JSE.
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