Hammerson (HMSO) has sold its stake in the Queensgate Shopping Centre in Peterborough, concluding a vintage year for the mall market. Seventy four shopping centres worth £4.1bn changed hands in 2013 - up from 29 worth £2.5bn in 2012 and well above the five-year average, calculates brokerage DTZ. And the deal flow is likely to continue - Land Securities (LAND) is reportedly close to selling both the Overgate shopping centre in Dundee and its stake in Cabot Circus, Bristol.
Britain’s economic recovery has made the property arms of big asset managers bullish towards shopping centres, formerly pariah assets on account of their vast size, waning popularity (footfall numbers have been declining) and exposure to the threat of online shopping. That has allowed the big real-estate investment trusts to offload properties for which there was no market even a few months ago. Invesco bought Queensgate from Hammerson for £202m - "marginally below" its June book value. In October F&C Reit bought the Bon Accord and St Nicholas centre in Aberdeen from joint-venture partners British Land (BLND) and Land Securities for £189m.
Reits face a constant balancing act between maintaining the recurring profits that fund dividends in the short term and driving longer-term growth through developments. Brokerage Liberum expects the Queensgate disposal to reduce Hammerson’s earnings per share by 2 per cent.
