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Shopping centre giant Hammerson shares drop as it confirms talks to sell retail parks

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UKRAINE - 2019/03/09:  In this photo illustration, the Hammerson plc company logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
Hammerson sites up for sale include retail parks in Falkirk, Didcot, Middlesbrough, St Helens, Telford, Merthyr Tydfil and Rugby. Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Shares in shopping centre giant Hammerson (HMSO.L) briefly rose more than 2% before falling around 2.9% on Monday morning in London following confirmation that it is in talks to sell some of its prime real estate portfolio.

Responding to media reports over the weekend, the owner of the Bullring shopping centre in Birmingham and Brent Cross in London confirmed that it is in discussions on terms of a possible disposal of its retail parks portfolio to private equity firm Brookfield.

Hammerson said that it "continues to make asset disposals in liquid markets to further strengthen the balance sheet, with gross proceeds of £73m achieved to date in 2021.

"There can be no certainty that a transaction will take place or the terms on which any transaction may occur. The Company will provide a further update in due course, if appropriate."

Hammerson shares fell on Monday morning. Chart: Yahoo Finance
Hammerson shares fell on Monday morning. Chart: Yahoo Finance

The news comes following reports over the weekend that seven sites are on the block for around £350m ($480m).

READ MORE: UK economy partially reopens as next stage of lockdown lift enacted

The Sunday Times first reported the sites include retail parks in Falkirk, Didcot, Middlesbrough, St Helens, Telford, Merthyr Tydfil and Rugby.

It has been a tough year for retail amid prolonged coronavirus lockdowns and widespread caution about returning to normality following lockdowns. 

Hammerson reported it suffered significant losses in 2020 amid the coronavirus pandemic, and is attempting to sell of some of its malls to survive the crisis.

The company posted a £1.7bn loss in March — the largest in its history — after the COVID-19 pandemic wiped £2bn off the value of its property portfolio.

It said losses widened from £781m in 2019 to £1.7bn last year, as the value of its shopping centres in the UK, France and Ireland pummelled.

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The portfolio value at the end of 2020 was £6.3bn, down from £8.3bn the year prior. This was driven by a 35.8% decline in its UK flagship retail destinations.

Hammerson's net rental income for the year dropped 41% halving to £158m. All but essential businesses in the firm’s centres have been forced to shut for the majority of last year, with many shops have withheld or deferred rental payments.

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