Global Jewel In Outlet Crown Up For Grabs For £1B-Plus As Hammerson Prepares To Leave Sector

UK REIT Hammerson is in detailed discussions to offload its stake in Value Retail, owner of the Bicester Village outlet centre, for about £1B, according to Sky News.

The broadcaster reported that Hammerson is talking to a number of investors about buying its circa 40% interest in Value Retail before the end of the year.

Hammerson has been one of the few mainstream retail real estate players to invest in the designer outlet market, which has generally performed far more robustly than the shopping centre sector over the past 15 years.

Value Retail is one of the world’s most successful designer outlet groups and was founded by real estate entrepreneur Scott Malkin, who continues to control a large shareholding in the business.

Bicester Village in Oxfordshire is focused on upscale and luxury retail and is often cited as achieving the highest sales per SF of any retail scheme internationally. Retailers have tended not to open other designer outlet stores in the south of England. 

The company also has locations in Shanghai and Suzhou in China that are branded under the Bicester Village name, while it has centres in cities including Barcelona, Frankfurt, Madrid and Milan.

Belmont Park Village in New York is scheduled to open next summer.

In February 2018, Hammerson upped its stake in Value Retail with a £76M investment as it focused on growing its premium outlet business, but earlier this year, CEO Rita-Rose Gagne said that the investment was no longer envisaged as a long-term hold.

"Value Retail is an attractive portfolio but, as we've previously stated, it's not part of our core proposition to have an investment in a platform. We are not forced sellers and will look to maximise our options at the right time,” Hammerson said in a statement issued to Sky News.

Hammerson's stake is thought to be valued at about £1.2B, and a deal to sell its holding would continue Hammerson's reshaping under Gagne, who has been at the helm since 2020, as the REIT divests retail assets, including its 50% stake in the retail proposals for Croydon, which it sold to development partner Unibail-Rodamco-Westfield.

In 2022, Hammerson also sold major shopping centres in Leeds and Glasgow.