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Hammerson Mulls Becoming BTR Developer In Its Own Right

Martineau Galleries site, rethought

The strategic review being undertaken by shopping-centre REIT Hammerson could see it becoming a build-to-rent housing developer in its own right.

The strategic review is also considering development partnerships and land sales, as well as options in senior living and co-living and is focused on how to deliver its ambitious City Quarters residential-to-workspace concept.

The City Quarters portfolio has the potential to deliver up to 6,600 homes, 1,600 hotel rooms and nearly 3M SF of workspace.

Whether or not Hammerson decides to go it alone as a BTR provider depends on the prospect of creating a sufficiently large BTR pipeline across the UK to make the investment in new talent and skills viable. 

The review is also examining whether partnerships with third-party providers might yield more effective returns, and to what extent this will involve land disposals.

The review extends beyond City Quarters to the future of its existing retail portfolio. The post-pandemic reopening of retail later this year could reveal unexpected levels of redundant and obsolescent retail floorspace.

Hammerson has already tiptoed into relationships with BTR providers, most recently at Highcross Leicester. It is working with Packaged Living on a 332-unit BTR scheme on the site of the city’s empty former 130K SF Debenhams in the Highcross shopping centre.

Experience in Leicester will feed into the strategic review, bringing Hammerson closer both to operational and investor requirements in BTR.

“With a land bank of 100 acres in major cities across the UK and Ireland, there are both short- and long-term opportunities to deliver real change in our urban communities,” Hammerson UK Director of Development and Project Management Robin Dobson told Bisnow.

“This goes further than just our unique land bank. It is a mindset that we are applying to all our destinations and how we can transform space. Our application to transform the former Debenhams’s unit at Highcross into build-to-rent homes is a good example of this. Our destinations and spaces will evolve to ensure we create places which meet the needs of tomorrow’s changing landscape.”

The Leicester BTR plan is a first step for Hammerson as it develops its UK City Quarters concept to help it diversify beyond retail. Projects include recently approved plans for the 10-acre Bishopsgate Goodsyard development that will see the creation of 500 homes and 1.4M SF of workspace.

The strategic review will also be significant for Birmingham’s Martineau Galleries scheme. Hammerson’s plans for the Birmingham site have evolved over the last four years from 1.2M SF of retail to 1,300 new homes and 1.4 SF of workspace on the 7.5-acre city-centre site. 

Hammerson is one of many big name companies talking through how they are bringing defunct real estate back to life at Bisnow's Repurposing Real Estate Digital Summit on 22 April. Sign up here.