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1 Of The World’s Biggest Real Estate Investors Has Doubled Down On Hammerson

Selfridges department store at Birmingham's Bullring shopping centre
The iconic Selfridges department store at Birmingham Bullring

The shares of listed companies that own UK shopping centres have taken an absolute battering in the past 18 months. In spite of this, one of the world’s five largest real estate investors has been steadily upping its stake in retail specialist Hammerson recently, and now owns a big chunk of the company.

Dutch pension fund APG owns $48B of real estate assets globally, making it the fourth-largest real estate owner in the world, according to IPE Real Assets. Since June, it has upped its stake in Hammerson from 9% to 17%, as of 12 November. That makes it the biggest shareholder in the company by a factor of three.

With Hammerson’s £2.24B market capitalisation, APG’s stake is valued at about £380M, and cost it around £150M to £200M to build this year. In the past six months, Hammerson’s shares have been on a roller coaster ride, dropping 25% in a fortnight at the end of July before recovering in August and September. Overall its shares have risen about 2% in the past six months, but still trade at a discount of 42% to the company’s net asset value, as the stock market anticipates further falls in asset values and income as retailers go bust or seek reduced rents.

APG declined to comment on why it upped its stake in the company. 

The company has a history in building big stakes in listed retail owners and acting as kingmaker in merger and acquisition deals. It was a major shareholder in European shopping centre giants Corio and Klépierre, which merged in 2015 to make Europe’s second largest shopping centre owner behind Unibail Rodamco Westfield.

APG was a major factor in persuading Hammerson to pull back from buying fellow UK-listed shopping centre owner Intu last year. Hammerson’s board also last year rejected an approach for the company from Klépierre. APG now owns 10% of Klépierre and 17% of Hammerson. Could it be a matchmaker again?

Hammerson said earlier this month that it had met its 2019 disposal target with the sale of the St. Oswald’s retail park in Glouster to the local council. The £54M price tag represented an 8% discount to the asset’s book value.

Hammerson set itself a disposal target following pressure from one of its other shareholders, Elliot Advisors. The company has also appointed new board members in the form of Gecina Chief Executive Méka Brunel and former Carlye head of international real estate Adam Metz.