Hammerson to raise capital and assume full control of two Birmingham malls by August 2025
Canada Pension Plan Investment Board (CPP Investments) will receive approximately $615m after agreeing to sell its 50 percent stakes in the Bullring and Grand Central shopping centres in Birmingham, UK, to Hammerson Plc.
As stated in the CPP Investments press release, the transaction is valued at £319m and is expected to close in August 2025.
The Bullring accounts for the larger portion of the deal and was sold at book value, with a net initial yield of 6.4 percent and a topped-up net initial yield of 7.1 percent.
CPP Investments initially acquired a 16.7 percent stake in the Bullring in 2013 and increased its holding to 50 percent in 2022.
Its investment in Grand Central began in 2016.
Between 2022 and the sale announcement, occupancy at the Bullring rose from 86 percent to 95 percent, and net operating income increased by 23 percent, according to CPP Investments.
Tom Jackson, managing director of Real Estate Europe at CPP Investments, said the Bullring has played a key role in the UK portfolio since the 2022 upsize.
He added that they “have worked closely with Hammerson to reposition the asset, increase occupancy and attract new anchor tenants.”
“[The] sale agreement allows CPP Investments to crystallise the strong performance of Bullring and realise value created, delivering significant returns for the CPP's 22 million contributors and beneficiaries.
With Hammerson taking ownership, both assets are well-positioned for a promising next phase under their experienced guidance,” said Jackson.
Hammerson plans to fund the acquisition through a share placing of up to 10 percent of its existing capital, as reported by Financial Post.
The company has moved from co-ownership toward full ownership of assets to allow for more operational control.
Shares in Hammerson rose by as much as 5 percent following the announcement, the largest intraday increase since April 10.
The Financial Post also reported that Hammerson raised its full-year earnings guidance and recorded an 11 percent increase in the value of its portfolio across the UK, Ireland and France in the first half of the year, supported by 5 percent like-for-like rental growth.
The Bullring has 1.3 million square feet of retail space and ranks among the top five shopping centres in the UK. Grand Central is undergoing repositioning following tenant changes during the COVID-19 period, as per CPP Investments.
According to Financial Post, this marks the first increase in Hammerson’s portfolio value since 2017.
The company is adjusting its strategy in a market where reduced development and conversions of retail space have constrained supply.
