Brookfield’s US malls are struggling. Now it’s buying some in Europe

Firm will acquire retail park portfolio from embattled mall operator Hammerson

National Weekend Edition /
Apr.April 17, 2021 09:00 AM
Hammerson CEO Rita-Rose Gagne and Brookfield's Bruce Flatt. (Hammerson, Brookfield, Getty)

Hammerson CEO Rita-Rose Gagne and Brookfield’s Bruce Flatt. (Hammerson, Brookfield, Getty)

The pandemic has pummeled malls across the U.S., including many controlled by Brookfield Asset Management. But Brookfield still sees in a future in the properties, at least across the Atlantic Ocean.

The firm has agreed to buy a portfolio of seven shopping centers from struggling U.K. mall giant Hammerson. Bloomberg reported the news, citing the British paper, the Sunday Times.

Brookfield will pay the equivalent of $479 million for the seven properties. Hammerson owns malls in the U.K., France and Ireland.

The properties are the same ones Hammerson agreed to sell to Orion last year for about $500 million. That deal fell through in May.

Hammerson said it continues to sell properties to “further strengthen its balance sheet,” adding that gross proceeds from sales this year total about 73 million pounds, or about $100 million, the report noted. That would make the Brookfield sale by far the firm’s largest deal this year.

On April 1, Brookfield reached an agreement to take its Covid-dinged real estate arm private by acquiring all of Brookfield Property Partners’ outstanding shares in a deal worth $6.5 billion. Brookfield Property Partners’ retail component has been hammered by the pandemic. The company controls one of the largest mall portfolios in the U.S. It has turned over some of these malls to lenders and said it is negotiating with special servicers on at least 20 of them in its fourth quarter earnings call with analysts.

Meanwhile, Hammerson wrote down the value of its real estate portfolio by about 2 billion pounds last year — $2.7 billion — citing a massive decline in rental income. As of the fall, Hammerson was recalculating rent with some tenants based on sales including online sales.

Recently appointed CEO Rita-Rose Gagne has signaled that Hammerson will continue selling properties. The firm is also considering redeveloping some of their retail properties with residential buildings.

[Bloomberg] — Dennis Lynch 


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