Developer Hammerson’s former London boss swooped on his old company today to buy up more than £500 million of offices in the capital.
Martin Jepson ran Hammerson’s London business until last year when he left for Canadian developer Brookfield with a brief to build up a £5 billion property portfolio.
Brookfield has been mooted as a likely buyer ever since Hammerson put its London offices up for sale four months ago to concentrate on its retail assets, which include the Brent Cross shopping centre.
Today’s deal sees Brookfield spending £518 million on about three-quarters of the Hammerson properties on the market, including the prized 99 Bishopsgate tower as well as 125 Old Broad Street.
Hammerson has been carrying out repairs at Old Broad Street, which has been plagued with glazing problems after panes of glass fell from the building.
Brookfield will also buy Leadenhall Court and the Principal Place development site on the fringes on the City. Hammerson originally wanted to hang on to Principal Place — which has planning permission for a 57,500 sq m office building and residential tower — although the project had been mothballed since law firm CMS Cameron McKenna pulled out as a potential tenant at the beginning of the year.
The disposals leave Hammerson with a handful of assets in the capital set to be sold over the next 18 months, although its own headquarters at 10 Grosvenor Place is no longer up for sale. The firm will keep its 50% stake in the former Bishopsgate Goods Yard in east London, where it plans a commercial and retail development in the heart of the “tech city” area.
Hammerson’s shares added 2% or 8.9p to 426.6p today as analysts welcomed the sale price — 5% above book value — extracted by the firm.
The developer will use the funds to invest in its European retail portfolio, including a £400 million shopping centre in Marseilles. Jeffries analyst Mike Prew said: “This is a leap forward in Hammerson’s retail focus strategy.”
