Hammerson sells stake in French shopping centre

Dundrum Town Centre co-owner Hammerson has sold its stake in a French shopping centre to the owner of Ikea.

The retail property investment firm, which owns Dundrum Town Centre alongside German insurer Allianz, made the announcement in relation to its 25 per cent stake in Italie Deux, a 62,000sq m shopping centre in central Paris.

It also disposed of its 100 per cent stake in the 6,500sq m Italik extension. It received a cash consideration of €164 million for the disposals to Ingka Centres, which owns the Ikea brand.

The main purpose of Ingka Centres is to support the establishment of Ikea stores and to drive footfall to them. It was set up in 1973 in Sundsvall, Sweden, when the first shopping centre opened together with an Ikea store.

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The sale price represents a 4 per cent discount to the December 31st book value and a net equivalent yield of 5 per cent.

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The exit marks the continued progress in the simplification of the company’s portfolio. The proceeds will further strengthen the balance sheet and reduce net debt.

Together with the £195 million (€222 million) of disposals completed in 2022, the group has generated total proceeds of £360 million against the company’s commitment of £500 million of disposals by the end of 2023.

Goodbody analyst Colm Lauder said the sale price was “encouraging” from an earnings perspective. “We estimate a net initial yield of 4.5 per cent based on passing £7.8 million at full year 2022,” he said.