Hammerson buys LxB Holdings for a total consideration of £199m
Hammerson revealed today that it had bought out-of-town retail specialist LxB Holdings for a total consideration of £199m.
LxB was set up by the former management of Granchester, which was acquired by Hammerson in 2001 in a bid to kickstart its out-of-town retail park portfolio.
The takeover gives Hammerson control of a £425m portfolio of retail warehouses that have been acquired by LxB Holdings in the last 12 months.
The portfolio comprises Manor Walks, Cramlington, Newcastle; Abbey Retail Park, Newtownabbey, Belfast; The Orchard Centre, Didcot; Seacourt Retail Park, Oxford; and a 50% interest in Parc Tawe Phase 1, Swansea.
The assets provide a combined floorspace of 1.25m sq ft (116,000 sq m) and currently generate rents of £16.1m a year. Principal tenants at the properties include Sainsbury, ASDA, Next, Tesco and B&Q. Hammerson anticipates that these developments could involve further expenditure totalling £200 million over the next five years.
John Richards, chief executive of Hammerson, said: ‘This acquisition substantially increases Hammerson's critical mass in the retail parks sector and extends the group’s development pipeline for retail warehousing. The parks in this portfolio all benefit from open A1 consents and provide a platform for good rental growth. Retailer demand for well configured retail park space remains strong and we believe such schemes will continue to outperform.’
Hammerson was advised by Strutt & Parker and Herbert Smith.
It is the second time in less than 18 months that the team behind LxB has sold its entire portfolio to a quoted property company following the sale of its original company and holdings LxB to Land Securities last summer. LxB is backed by HBOS, Baugur and West Coast Capital.