Hammerson to raise R4.23 billion from the market for Manchester Arndale acquisition

The Hammerson-owned Ilac centre in Ireland.

Hammerson plans to raise up to £190 million (R4.23 billion) in connection with the acquisition of a 50% interest in Manchester Arndale, the largest city-centre shopping mall in the UK outside London, from Palma Arndale BidCo.

The JSE and London listed retail property REIT said Thursday the £218m acquisition price represents a net initial yield (NIY) of 7.8%. The equity raise will comprise the issue of new shares through a placing to institutional investors, a retail offer, and a subscription by directors including the CEO and chief financial officer.

"This is another important step in our strategy to increase scale through acquiring high-quality, retail-led destinations. Manchester is one of Europe’s most dynamic and fastest-growing urban economies, benefiting from strong demographics, excellent connectivity and the largest retail catchment outside London,” said Hammerson’s CEO Rob Wilkinson.

The institutional placing was being conducted through an accelerated bookbuild, which was launched Thursday morning.