Shoppers use a walkway to enter the Selfridges & Co department store, part of the Bullring shopping centre, operated by Hammerson. Selfridges at Bullring features luxury fashion and beauty, to gourmet food and homeware.
Image: Chris Ratcliffe, Bloomberg
Hammerson, the London and JSE-listed retail-focused Real Estate Investment Trust, might raise additional capital again later this year from the market to help fund possible acquisitions, the newly appointed CEO Rob Wilkinson said on Monday.
Just over 30% of the group’s shares are owned by South African institutional shareholders, with the Public Investment Corporation and Coronation Fund Managers among the major shareholders. The group raised £319 million (about R7.6 billion) last July through an institutional equity placing, representing about 10% of issued share capital.
The funds were used to help fund the purchase of the remaining 50% stake in Birmingham’s Bullring & Grand Central shopping centre. Hammerson invests in prime retail-led city destinations in the UK, France, and Ireland. For the year to December 2025, the group increased net rentals by 23% to £180m, while the portfolio value was up 33% to £3.5bn.
Wilkinson, appointed on January 1 this year, said at a briefing in Cape Town that the group’s support from its South African shareholders in the capital raise last year had been “crucial” and “impressive.”
He added that there were some estimations that up to £3bn of retail centres may come up for sale in the UK this year, and there was not a long list of potential buyers. The group was also hoping to expand further into Western European markets. This was apart from the further opportunities for expansion at its existing centres, with, for instance, its UK centres owning land around them that could provide further expansion opportunities.
He said there has been a "renaissance in retail” in the UK and in Western Europe over the past 18 months, which in terms of footfall, was a reversal from 5 or 6 years ago, when market uncertainty about the outcome of online trading, the Covid pandemic, and other factors were driving down retail property sector valuations, and fewer people were going to the malls.
Since then, retailers had realised they needed to have a physical as much as an online presence, and that they need to adopt an omni-channel approach, with stores not in every UK town or city, as was the case previously, but with a physical presence in at least the top 30 or 40 destinations in the UK where there were growing footfalls. Hammerson owns 10 centres, 5 of which are in the UK.
Wilkinson said the sharp increase in portfolio valuation was due to the asset management initiatives, and the fact that some value was added through the purchase last year, at discounts, of the 50% remaining stakes in 4 of the group’s 5 UK centres.
He said shoppers had returned to the malls due to asset management initiatives to ensure customers were offered an “experiential” experience, with food, fashion, and entertainment now complementing the previous focus just on groceries. Being a 100% shareholder in the centres now meant the group also has the capacity and willingness to expand and improve its centres.
He cited as an example the recent addition of AI technology to its camera network that, for instance, identifies consumer demographics by reading individuals from the neck down, how the individual responds to screen advertising, and how long they look at it, where they shop, and retail centre traffic flows.
He said the group’s properties were valued at 20% to 40% below replacement cost, so they could not be replaced, and a number of other retail centres had closed in the UK in recent years, taking other potential new supply out of the market. Tenancy rentals were now making up 13% to 15% of their turnovers, while in previous years, this figure was around 20%.
Wilkinson said a main driver of retail centre growth was Gen Z, who are currently aged between 14 and 29, and who make up the biggest numbers in terms of footfall and in terms of spending at the large shopping centres.
Another key to turning around the centres had been the repositioning of large vacant spaces that were left when large, traditional anchor tenants either closed, left, or reduced space - this provided the centre with a better mix of tenants, with, for instance, the introduction of a luxury cinema in the group’s Bristol centre, Cabot Circus, which was bringing additonal footfall to the centre in the evenings and now provides the only cinema in the city.
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