The Hammerson-owned Ilac centre in Ireland.
Image: Supplied
Hammerson plans to raise up to £190 million (R4.23 billion) in connection with the acquisition of a 50% interest in Manchester Arndale, the largest city-centre shopping mall in the UK outside London, from Palma Arndale BidCo.
The JSE and London listed retail property REIT said Thursday the £218m acquisition price represents a net initial yield (NIY) of 7.8%. The equity raise will comprise the issue of new shares through a placing to institutional investors, a retail offer, and a subscription by directors including the CEO and chief financial officer.
"This is another important step in our strategy to increase scale through acquiring high-quality, retail-led destinations. Manchester is one of Europe’s most dynamic and fastest-growing urban economies, benefiting from strong demographics, excellent connectivity and the largest retail catchment outside London,” said Hammerson’s CEO Rob Wilkinson.
The institutional placing was being conducted through an accelerated bookbuild, which was launched Thursday morning.
Wilkinson said the acquisition significantly expands their scale and footprint in a top-tier city centre destination in the UK, one of the company’s core markets.
“The Arndale is a high quality, scale asset with high occupancy and an affluent and growing catchment of 6.4m, the largest outside of London, with an annual footfall of 45 million. There remain compelling income and value creation opportunities from leveraging Hammerson’s integrated platform to drive consumer, brand appeal and ultimately rents,” he said.
The acquisition and share placing were expected to be earnings accretive from day one. The group’s guidance for the 2026 financial year was increased to total net rental income growth of 28% (25% underlying, 3% from the acquisition) and earnings of growth of 27% to £132m (The previous guidance was £120m, and the new figure includes £7m from the acquisition).
“The transaction will be immediately earnings accretive, and we see a clear path to income and value creation, leveraging Hammerson's platform to enhance the destination and deliver attractive long-term returns for our shareholders," he said.
He said the group’s city-centre destinations have continued to outperform. In the first half of 2026, group like-for-like footfall was up 3% year-on-year with the UK and Ireland up 3%, and France up 4%, whilst national indices were flat or slightly negative.
“The highest increases were where we completed recent repositionings and brought new offers and concepts to the schemes. Group like-for-like sales were up 2% year-on-year, with France leading the way up 4%,” he said.
He said their occupancy increased one percentage point year-on-year to 96% in the first half of their financial year to June 30, representing the highest first half occupancy in the like-for-like portfolio for seven years.
Hammerson increased its interim dividend by 22% to 9.67 pence at the end of the half year stage.
“Hammerson’s strategy is now naturally broadening to external acquisitions. The Arndale represents Hammerson’s first major external acquisition in over a decade,” said Wilkinson.
“What was already proving to be a strong underlying performance this year is now further enhanced by today’s acquisition. We are now guiding FY26 earnings to be 27% greater than FY25, strengthening our path of sustainable growth, and underpinning a new medium-term outlook,” he said.
Hammerson also has a strategy of unlocking the value in its land. Hammerson has some 60 acres of land in the UK and Ireland which represents “a significant opportunity for value creation and capital recycling.
Year to date, including the partial disposal of Dublin Central after June 30, 2026, £75m of strategic land holdings had been disposed of at a substantial premium to book value.
“For the remaining book value of £291m, we remain open-minded on the potential opportunities to maximise value with the optimal delivery depending on market circumstances and the context and scale of each opportunity,” he said.
“Further acquisitions will require minimal incremental resource relative to the scale of earnings acquired and we therefore expect to continue to generate significant operating leverage as we grow,” he said.
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