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Hammerson led joint venture acquires Silverburn shopping centre

Last updated: 03:18 21 Dec 2009 EST, First published: 04:18 21 Dec 2009 EST

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European Real Estate Investment Trust (REIT) and Hammerson (LSE: HMSO) announced they had entered into a 50:50 joint venture with the Canada Pension Plan Investment Board (CPPIB) to acquire the 93,000 m² Silverburn  shopping centre near Glasgow. The JV will pay a total of £297 million for the property, representing a £148.5 million commitment for each party.


"Silverburn is a high quality, modern shopping centre which complements Hammerson's existing portfolio of dominant centres in prime retailing locations”, Hammerson Chief Executive, David Atkins said, “Regional centres like Silverburn have shown strong performance in their first ten years of operation and we believe that by applying our skills at asset management and optimising the tenant mix we can increase retail sales and achieve good growth from this asset."


The JV agreed the deal with the receivers of The Elementary Property Company Ltd, Hammerson will be the asset manager. According to this morning’s announcement the property’s current gross rental income is £18.4 million, which represents an initial yield of approximately 6%.


Silverburn attracts approximately 14 million customers per year, it is a single-level covered centre with 94 retail units let to high quality retailers, including Debenhams (LSE: DEB)Marks and Spencer (LSE: MKS)Next (LSE: NXT) and Tesco (LSE: TSCO).


The centres overall rents are estimated to be as much as 20% below current market rental levels, with first rent reviews at the centre starting from 2012. Additionally there is potential to extend the centre by around 9,300 m², and the acquisition also includes 69,000 m2 of adjacent development land.

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