UK REIT Hammerson is putting its largest property up for sale in a bid to shore up its financial position. The company has reportedly hired CB Richard Ellis to market the 773,931 sq ft (72,000 m2) Bishops Square office development in the City of London for more than 拢500 mln (EUR 553 mln). According to the Financial Times, the transaction could also be split into four equal tranches to make the sale easier.
UK REIT Hammerson is putting its largest property up for sale in a bid to shore up its financial position. The company has reportedly hired CB Richard Ellis to market the 773,931 sq ft (72,000 m2) Bishops Square office development in the City of London for more than 拢500 mln (EUR 553 mln). According to the Financial Times, the transaction could also be split into four equal tranches to make the sale easier.
Last weekend, rating agency Moody's changed its outlook from stable to negative for Hammerson's Baa2 issuer rating. 'The change to negative outlook relates to the expected further weakening of the overall economic environment in Europe and in the property markets of the UK and France, and the potential impact that rising yields, reduced occupier demand and their credit profile, and moderating rent levels could have on the company's operating income, interest cover and leverage,' said Lynn Valkenaar, a senior analyst in Moody's Corporate Finance group.
Moody's said values would need to fall 30% from the levels in June last year to pressure Hammerson's net debt-to-equity covenant. But the rating agency cautioned: 'The headroom is not as ample as previously thought and a fall in asset values is not something that Hammerson can control.'
JPMorgan said it is maintaining its neutral stance on Hammerson, having factored in a 拢500 mln disposal and 拢100 mln equity raising into its valuation model for the company.
