# Hammerson buys remaining 50% of The Oracle, lifts FY25 earnings guidance

- Link: https://www.directorstalkinterviews.com/hammerson-buys-remaining-50-of-the-oracle-lifts-fy25-earnings-guidance/4121226690
- Published: 2025-11-21T07:35:57+00:00
- Author: Amilia Stone

**Hammerson plc** (LON:HMSO) has announced the acquisition of the remaining 50% 
interest in The Oracle, Reading, alongside a strong year-to-date trading performance
and upgraded EPRA earnings guidance for FY25.

**Acquisition of The Oracle**

·   Completion of the acquisition of the remaining 50% interest in The Oracle from
its JV partner, a wholly owned subsidiary of the Abu Dhabi Investment Authority (“
ADIA”), at a headline price of £104.5m^(1), reflecting a stabilised yield of 8.9%
^(2) and the opportunity to capture its future growth. The acquisition is expected
to be c.5% accretive to the Group’s FY26 EPRA earnings^(3).

·    The Oracle, Reading, is one of the top retail, leisure and lifestyle destinations
in the UK, and is benefitting from significant landlord and occupier investment 
in recent years to repurpose the former House of Fraser to new offers from TK Maxx
and Hollywood Bowl.

·     We have secured a flurry of additional leasing deals including flagship store
upsizes with Zara and Apple, both due to open in H1 26, and renewals with premium
brands L’Occitane and Space NK.

·    Year to date, we have exchanged 30 deals at The Oracle, representing £4.5m 
of headline rent, or around £21m of rent contracted to first break. Long term deals
were signed at spreads ahead of both previous passing rent and ERV on a net effective
basis.

·     We have driven occupancy up from 93% at the start of the year to 97%.

·    Like-for-like footfall for Q3 was up 10% year-on-year following the openings
of TK Maxx and Hollywood Bowl, with footfall up 3% year-to-date. Q3 like-for-like
sales were up 3% quarter-on-quarter and we have seen a 17% rise since Q1, with the
benefit of new openings yet to come.

·     Year-to-date GRI is up 9% and NRI up 20%, as previously underutilised space
is occupied.

·     The value is up 11% since 2023, benefitting from the investment in repositioning.

·   There are additional opportunities to unlock further value, including the former
Debenhams and existing cinema block around the riverside where we are exploring 
retail, F&B, leisure and BTR options.

**FY25 GRI and EPRA Earnings Upgrade reflecting continued momentum and acquisition
of The Oracle**

·      Total gross rental income growth raised to 19% (from the 17%^(4) previously
guided).

·      Like-for-like gross and net rental income growth expected to be around 3%.

·      EPRA earnings forecast increased to “at least” £102 million (previously “
around” £101m^(5)).

·     Further growth expected in 2026 and 2027 as the full benefits of our repositionings
and acquisitions come through, underpinning the Group’s medium-term guidance of 
an 8-10% EPRA EPS CAGR.

**Strong year-to-date Group performance in footfall, sales and leasing**

·   Q3 Group footfall increased by 5% year-on-year and like-for-like sales grew 
2%, with Q3 year-to-date Group footfall and like-for-like sales both up 2%. The 
UK showed particularly strong Q3 footfall and like-for-like sales year-on-year growth
of 6% and 3% respectively.

·   Demand for our space is robust. We have signed 261 leases with £38m of headline
rent, representing £190m of contracted rent to first break, at 49% ahead of previous
passing rent and 12% ahead of ERVs. The pipeline remains strong with c.£26m of headline
rent of which c.£10m is in solicitors’ hands^(6).

·   The UK is a particular highlight with deals representing £20m of headline rent
exchanged 43% above previous passing rent and 16% ahead of ERV.

·     The Group’s resulting occupancy is 95%, which we expect to improve with ongoing
repositioning.

**Balance sheet strengthened during the period**

·     Following two credit rating improvements in October (outlook on Moody’s Baa2
rating changed to positive, Fitch Senior Unsecured rating upgraded to A-), the Group
commenced early refinancing of its €700m 1.75% 2027 bond with the issuance of a 
€350m 3.5% bond. The Group also signed a new unsecured £100m drawn term loan maturing
in 2028. The £338m 3.5% bond maturing in October 2025 was also repaid from existing
cash on balance sheet.

·     As a result of the acquisition and our proactive refinancing activity, we 
expect FY25 weighted average debt maturity of around 4.8 years and weighted average
debt cost of around 2.4%.

·   The acquisition of The Oracle is funded from existing cash on balance sheet 
with a resulting Q325 pro forma LTV of c.37% and Net debt:EBITDA c.9.0x^(7). Net
debt:EBITDA is expected to decrease to around 8x at FY26 reflecting the annualised
benefit of the acquisitions of Brent Cross, Bullring and Grand Central, and The 
Oracle.

·  The Board remains committed to maintaining a resilient and sustainable capital
structure of Net debt:EBITDA in the 6-8x range, and LTV of around 35% through the
cycle. Looking ahead, the Company continues to see opportunities to recycle capital
via asset rotation.

> **Rita-Rose Gagné, CEO of Hammerson, commented:**
> _“We have seized the opportunity to gain full control of The Oracle, an asset 
> in transition, to capture the growth opportunities ahead. This represents our 
> fourth JV buyout in a little over a year, as we continue to act decisively and
> execute our growth strategy at pace._
> _Our recent investments at The Oracle have driven an uplift in footfall, sales
> and leasing with the recent openings of TK Maxx and Hollywood Bowl. We expect 
> a further boost from the opening of flagship stores for Zara and Apple in early
> 2026. There is more to come._
> _Combined with our continued strong performance and acquisition of The Oracle,
> we expect further growth in 2026 and 2027 as the full benefits of our repositionings
> and acquisitions come through, underpinning the Group’s medium-term guidance of
> an 8-10% EPRA EPS CAGR.”_

^(1 Headline price net of purchaser’s cost)

^(2 Based on expected incremental NRI for FY26 of c.£10m from The Oracle. Calculation
includes purchaser’s costs. Q325 net initial yield of 7.2%, and topped-up net initial
yield of 7.5%.)

^(3 Accretion based EPRA Earnings consensus of c.£114m on Visible Alpha at 19 November
2025 and the net benefit of the acquisition of c.£6m after finance costs.)

^(4 As per Half Year 2025 Results 31 July 2025.)

^(5 As per Bond Pricing, Guidance and Operational Update on 9 October 2025.)

^(6 As at 14 November 2025)

^(7 Based on Q325 actuals adjusted for the acquisition; Net debt:EBITDA rolling 
12 months)

Share on: