Hammerson, the leading malls operator in the UK, is contemplating the sale of its 50% stake in VIA Outlets to its joint venture partner APG, a Dutch pension fund, in order to raise much-needed cash. VIA Outlets manages a collection of high-end outlet malls located across Europe and has been a profitable aspect of Hammerson’s business. Additionally, the company is considering a rights issue to raise equity.

In an effort to effectively manage costs and cash flow, Hammerson has implemented proactive measures. One such measure includes obtaining approval for up to £300 million through the Covid Corporate Finance Facility (CCFF) offered by the Bank of England. Following the reopening of its flagship destinations across Europe, Hammerson has observed an improvement in footfall and sales. Furthermore, rent collection in the UK for Q3 has surpassed 30%, excluding monthly payments and deferrals. This represents a substantial improvement from the 16% that was collected at the end of June.

Recent reports suggest that Hammerson intends to raise approximately £800 million by means of a rights issue and the sale of its stake in VIA Outlets. It is anticipated that the rights issue will account for £600 million of the total amount.

This development arises as Hammerson, alongside other retail property owners, grapples with the challenges posed by the COVID-19 pandemic. Lockdowns and restrictions have significantly diminished footfall and sales, placing considerable strain on rent collection. Hammerson’s consideration of a stake sale and rights issue reflects its ardent endeavours to fortify its financial position and navigate the prevailing market conditions.

The potential sale of its stake in VIA Outlets holds significant promise for Hammerson, as it would generate a substantial cash injection to support the company during these trying times. In addition, the rights issue would provide supplementary funds to enhance its financial stability.

Given the pervasive uncertainties within the retail industry, companies like Hammerson are exploring a range of options to ensure their survival. The emphasis on cost management, cash flow, and equity raising demonstrates Hammerson’s proactive approach in weathering the storm. As footfall and sales steadily improve, there remains hope that the company will successfully rebound from the challenges inflicted by the pandemic.

Ultimately, Hammerson’s decision to divest its stake in VIA Outlets and contemplate a rights issue constitutes a strategic manoeuvre intended to reinforce its financial standing and secure its future in an ever-evolving retail landscape.

Useful links:
1. Hammerson – Official website of Hammerson, providing more information about the company’s operations and initiatives.
2. VIA Outlets – Official website of VIA Outlets, offering insight into the operation and management of the high-end outlet malls in Europe.