Retail REIT Hammerson is consulting on plans to convert a major portion of one of its shopping centres into homes for rent, as it repurposes its portfolio away from retail to improve values.

The REIT is planning to build up to 475 new homes in two blocks at the Oracle mall in Reading, 40 miles west of London, which it co-owns with ADIA, CoStar reported.

The apartments will be built on the site of a former Debenhams department store and part of an existing Vue cinema, which will be reconfigured. Hammerson is working with BTR specialist Packaged Living on the developments, which are at the eastern end of the centre.

It is the biggest repurposing yet undertaken by Hammerson, which previously worked with Packaged Living to build 300 flats in a former Debenhams at the Highcross shopping centre in Leicester.

Hammerson is developing a "mixed-use quarter complementing the retail and leisure offer, providing high quality, managed, residential rental homes, and coworking environment in the heart of the town centre” in the consultation, CoStar reported.

Hammerson has a market capitalisation of £1.2B, and it has seen its share price drop by almost a third since February over worries high inflation would curtail consumer spending.

It is repurposing retail to other uses in an effort to increase values for the long term.

At the Oracle, Hammerson and ADIA are already converting a 130K SF House of Fraser department store into a food hall, bowling alley and golf complex.

ADIA has put its stake in the centre up for sale for £220M.