In a statement Hammerson said it was generating £600m (€712m) in cash proceeds by disposing of its “overweight, non-controlling and yield-dilutive interest” in Value Retail. This would mean a “clean exit from a complex structure at an attractive price”.
The purchaser is L Catteron, a private equity firm that has the backing of LVMH Moet Hennessy Luis Vuitton, a luxury fashion group.
Value Retail has specialised in the creation of luxury shopping destinations, and operates nine around Europe, including La Roca Village in Barcelona, Bicester Village near Oxford, La Vallee Village in Paris, as well as similar venues in Frankfurt and Milan.
It has a 41pc stake in Kildare Village, which opened in 2007, and which has been extended on a number of occasions since. Prada, Polo Ralph Lauren and Mulberry are among the luxury brands there.
The sale by Hammerson had been expected, as it focuses on cutting its debt, reducing the number of non-core assets and investing in its city centre retail properties. The post-Covid period has been difficult for the owners of shopping centres, with a continued drift towards online shopping and a fall in property values.
Rita-Rose Gagné, CEO of Hammerson, said it was a transformational deal, that would position the company for accelerated growth and value creation.
“The disposal focuses our portfolio on prime urban real estate with a transformed capital structure and the capacity and capability to advance our strategy in higher yielding opportunities with stronger returns, whilst enhancing returns to shareholders,” she said.
“I’m excited about the opportunity this gives us to build on our momentum and track record of the last three years. We are at a point in the cycle where I can now be on the front foot to capture the exceptional value creation opportunities I see in the near, medium and long term. This is exactly what this transaction will deliver.”
Michael Chu, global co-CEO of L Catterton, said Value Retail was well positioned for growth and continued success. “We have deep experience investing in luxury retail, and we are eager to leverage our operational expertise and global network of established relationships to partner with Value Retail and propel the business forward.”
Hammerson’s property portfolio in Britain includes Brent Cross shopping centre in London and the Bullring in Birmingham.
In Ireland, as well as its 50pc stake in Dundrum Town Centre, it has a half stake in the Ilac centre in Dublin city centre and in the Pavilions shopping centre in Swords.
The British property group controls the 5.5 acre site on O’Connell Street which was once home to the Carlton cinema, but its redevelopment project for the area has hit a range of planning and legal hurdles.