Hammerson has announced it is to sell off its entire office space portfolio.
The firm will put more than £500 million worth of property onto the market to concentrate on its retail sites.
The developer Hammerson has shocked the commercial property industry by announcing it is to pull out of the office space market altogether to concentrate on its retail space.
The Bullring-owner will now sell off its entire London-based office portfolio, which is thought to be worth around £500 million, over the next three years. Hammerson’s office portfolio consists of four buildings in the City and two in the West End and is thought to amount to 10% of their £5.7 billion portfolio.
The new assets due to put onto the market include the City’s 1 Leadenhall Court, 10 Gresham Street and 99 Bishopsgate, while the firm’s own headquarters at 10 Grosvenor Street in the West End is also being sold.
The announcement comes after CMS Cameron McKenna pulled out a pre-let of Hammerson’s Principal Place scheme in Central London in January and is sure to add to a growing sense of unease in the capital’s office space market.
Commenting on the decision, Hammerson’s chief executive David Atkins said: “Following the review of our strategy we will focus on being the best owner-manager and developer of retail property within Europe. Hammerson has created a retail business delivering outperformance from prime assets in winning locations.
“We now intend to sell our standing office investments over the medium term to maximise returns, redeploying capital into the retail sector to exploit our expertise and build on our existing scale.
“This will create efficiencies that lead to further cost savings and income growth from our portfolio.”
It’s thought the developer will use the proceeds from the office sales to fuel its growing retail portfolio in the UK and Europe which includes Brent Cross in North London and The Oracle in Reading.