Hammerson has completed the acquisition of a 50% stake in Manchester Arndale shopping centre from Palma Arndale BidCo for £218m in a deal representing a topped-up net initial yield of 7.8%.
The circa 1.8m sq ft centre, which was rebuilt after it was badly damaged by the 1996 Ira bombing of Manchester, was owned by Intu until it collapsed into administration in 2020. M&G owns the other 50% stake in Manchester Arndale.
Sovereign Centros from CBRE – on behalf of M&G Real Estate – and Global Mutual act as joint asset managers of Manchester Arndale. JLL was appointed to market the sale of the centre earlier this year.
Rob Wilkinson, chief executive of Hammerson, said: “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. Manchester Arndale sits at the heart of this exceptional city and has established itself as a premier retail destination, attracting more than 45 million visitors each year.
“Ownership of this prime asset allows us to further strengthen our position in one of the continent’s leading cities. The transaction will be immediately earnings accretive, and we see a clear path to income and value creation, leveraging Hammerson’s platform to enhance the destination and deliver attractive long-term returns for our shareholders.”
