Hammerson plc (LON:HMSO) has announced its intention to raise up to 10% of existing issued share capital (c. £190 million) in connection with the acquisition of a 50% interest in Manchester Arndale from Palma Arndale BidCo Limited, completed on 29 July 2026. The acquisition price of £218 million represents a topped-up NIY of 7.8%.
The Equity Issue will comprise the issue of new ordinary shares of 5 pence each in the capital of the Company through:
· a non-pre-emptive placing of new Ordinary Shares to institutional investors at the Placing Price (as defined below);
· a retail offer via RetailBook to provide retail investors in the United Kingdom with an opportunity to acquire new Ordinary Shares at the Placing Price; and
· a subscription for new Ordinary Shares by certain directors of the Company, including the Chief Executive Officer and Chief Financial Officer, pursuant to which they intend to subscribe for c. £230k in aggregate, in each case at the Placing Price.
The Placing will be conducted through an accelerated bookbuild which will be launched immediately following this announcement.
A separate announcement will be made shortly regarding the Retail Offer and its associated terms.
Highlights
· Proposed Equity Issue of up to 10% of issued share capital to part fund the acquisition of a 50% interest in Manchester Arndale from Palma Arndale BidCo Limited
· The Acquisition significantly expands Hammerson’s scale and footprint in a top-tier city centre destination (A rated by Green Street) in the UK, one of the Company’s core markets
· The Arndale is a high quality, scale asset with high occupancy and an affluent and growing catchment of 6.4m, the largest outside of London, with annual footfall of 45m
· There remain compelling income and value creation opportunities from leveraging Hammerson’s integrated platform to drive consumer, brand appeal and ultimately rents
· The Acquisition and Placing is expected to be earnings accretive from day one, with FY26 pro forma EPRA EPS accretion of more than 2% for minimal c.1% NTA dilution(1)
· The Company is increasing guidance for FY26: total NRI growth of c.28% (25% underlying, 3% from the Acquisition) and EPRA earnings of +c.27% to c.£132m (£125m underlying vs. previous guidance of c.£120m, £7m from the Acquisition)
· Balance sheet strength will be enhanced, with pro forma HY26 LTV reducing to c.36% and net debt:EBITDA to c.7x(2), commensurate with the Group’s strong IG credit rating
(1) Pro forma on FY26 underlying business guidance of EPRA earnings of £125m, assuming 10% placing at a 3% discount to undisturbed price of 360 – 370p
(2) HY 26 balance sheet pro forma for post 30 June 2026 disposal of Dublin Central, acquisition of 50% of the Arndale and expected outcome of associated equity placing
Rob Wilkinson, Chief Executive Officer of Hammerson, commented:
“This is another important step in our strategy to increase scale through acquiring high-quality, retail-led destinations.
Manchester is one of Europe’s most dynamic and fastest-growing urban economies, benefiting from strong demographics, excellent connectivity and the largest retail catchment outside London. Manchester Arndale sits at the heart of this exceptional city and has established itself as a premier retail destination, attracting more than 45 million visitors each year.
Ownership of this prime asset allows us to further strengthen our position in one of the continent’s leading cities. The transaction will be immediately earnings accretive, and we see a clear path to income and value creation, leveraging Hammerson’s platform to enhance the destination and deliver attractive long-term returns for our shareholders.”
Background to the Equity Issue
Hammerson has three strategic priorities as set out at the FY25 results: driving destination outperformance; maximising value from strategic land; and increasing scale. Our focus on executing against these three priorities means we have had a strong first half and are upgrading our earnings guidance for FY26. Moreover, it gives us confidence in our ability to deliver attractive medium term growth and returns.
Our first priority is to keep doing what we do best: targeted leasing and partnership with best-in-class brands to create the most attractive mix for visitors and occupiers, in turn driving growth in footfall and sales, increasing occupancy and rental tension. Our city-centre destinations have continued to outperform. In the first half of 2026, group like-for-like footfall was up 3% year-on-year with the UK and Ireland up 3%, and France up 4%, whilst national indices were flat or slightly negative. The highest increases were where we completed recent repositionings and brought new offers and concepts to the schemes. Group like-for-like sales were up 2% year-on-year, with France leading the way up 4%.
We signed leases representing £18.5m of headline rent secured across 234 leases at 30 June 2026. This included the lease up of The Ironworks residential scheme in Dundrum, which is already 80% occupied, with the remainder anticipated in the second half of the year. Once fully let, The Ironworks will contribute c.€1.5m of annualised NRI at share. Long term retail deals were signed 52% ahead of previous passing rent, or 17% excluding those with £nil previous passing, and 9% ahead of previous reported ERV.
As a result, occupancy increased one percentage point year-on-year to 96%, representing the highest first half occupancy in the like-for-like portfolio for seven years. We have a robust pipeline of over £20m as we look forward to the second half.
The second priority is to unlock the value in our strategic land. Hammerson has c.60 acres of strategic land in the UK and Ireland which represents a significant opportunity for value creation and capital recycling. Year to date, including the partial disposal of Dublin Central after 30 June 2026, we have disposed of £75m of strategic land holdings at a substantial premium to book value. For the remaining book value of £291m, we remain open-minded on the potential opportunities to maximise value with the optimal delivery depending on market circumstances and the context and scale of each opportunity.
The third priority, most relevant to the Acquisition and Placing announced today, is to increase our scale. Increasing our scale allows us to generate operating leverage through our efficient and scalable platform, driving growth in income and earnings. Further acquisitions will require minimal incremental resource relative to the scale of earnings acquired and we therefore expect to continue to generate significant operating leverage as we grow.
As we scale, we will remain disciplined. Our focus is on leveraging our platform and expertise in investing in and managing retail-led destinations where we can see strong returns above our cost of capital and that are accretive to earnings ideally immediately, or within the first full year. As a listed REIT, we intend to fund acquisitions through a combination of debt and equity and some recycling from our strategic land, and therefore, we will maintain our strong IG credit rating through the cycle and access to capital markets.
Our strategic focus will remain on landmark retail-led destinations. Future portfolio additions will be aligned to our strategic themes: investing in cities and larger conurbations with strong economic fundamentals and attractive and growing catchments; the polarisation between the “best and the rest” destinations as occupiers pursue fewer, larger stores in only the best locations; and, the primacy of the unified commerce models where physical space is essential to a seamless online-offline customer experience.
The quality of the catchment is more important than scale alone. Smaller destinations can play a highly complementary role within the portfolio. We therefore see opportunities across a range of asset sizes provided they serve strong catchments and have a degree of occupier synergy with our existing assets, supporting rental growth and driving operational efficiency. Lastly, we seek assets where we can bring the expertise of our integrated retail platform to bear to unlock value add opportunities through repositioning and asset enhancement, brand mix optimisation and advancing integral and adjacent development opportunities.
Manchester Arndale delivers on all of these characteristics. It is a top tier city centre destination, with high footfall and sales, and an affluent, growing catchment. The occupier mix is strong with a high overlap with the existing portfolio, yet with ample opportunity to bring our expertise to bear to drive income and value creation in the years to come. We expect the acquisition to be immediately accretive to EPRA earnings per share, funded by the associated equity placing to enhance our balance sheet strength.
Use of Proceeds
The net proceeds of the Equity Issue will be used to fund a portion of the consideration for the Acquisition and other transaction-related costs, with the remainder financed from existing cash.
Financial Impact of the combination of the Equity Issue and Acquisition
The Acquisition represents a topped up net initial yield of 7.8%. Combined, the Placing and Acquisition are expected to be immediately accretive to earnings with FY26 pro forma EPRA EPS accretion of more than +2% for minimal c.-1% NTA dilution.
Moreover, there remain compelling income and value creation opportunities from leveraging Hammerson’s integrated platform. Identified opportunities include the modernisation of the public realm to improve wayfinding, dwell time and cement Manchester Arndale’s position at the heart of the city centre. Elevating the current brand mix, by reconfiguring oversized legacy units into smaller, in-pitch space that today’s leading brands are actively seeking. Attracting the new leading global brands most in demand from visitors, ultimately all of the above driving rents and capturing reversion.
Pro forma HY26 for the acquisition and other post balance sheet date events, principally the partial disposal of Dublin Central, balance sheet strength would be enhanced with LTV standing at c.36% and net debt:EBITDA at c.7x, commensurate with the Group’s solid IG credit rating.
Upgraded FY26 Outlook
We’ve delivered another strong half with total net rental income up 40%, EPRA earnings up 33% and EPRA earnings per share up 22%. We now expect total NRI growth of c.28%, comprising 25% from the underlying business, and a 3% contribution from Manchester Arndale. FY26 EPRA earnings are now expected to be c.£132m, representing growth of c.27% year-on-year, c.£125m from the underlying business, compared with previous guidance of c.£120m, and a £7m contribution from the Arndale.
Details of the Placing, Retail Offer and Subscription
The Placing is being conducted through an accelerated bookbuild which will be launched immediately following the release of this Announcement. Morgan Stanley & Co. International plc and Peel Hunt LLP are acting as Joint Global Co-ordinators and Financial Advisers in connection with the Placing. Investec Bank Limited is acting as financial adviser, sole SA bookrunner and placing agent, and JSE sponsor. Lazard & Co., Limited are acting as Lead Financial Adviser, alongside Morgan Stanley and Peel Hunt as Financial Advisers, in connection with the Acquisition. Morgan Stanley and Peel Hunt are also acting as Joint Corporate Brokers. The Bookbuild may close at any time after launch, at the discretion of the Banks and the Company.
Investec has also been appointed as the Company’s Authorised Dealer within the meaning of the Currency and Exchange Manual for Authorised Dealers issued by the Financial Surveillance Department of the South African Reserve Bank.
Concurrently with the Placing, there will be a separate Retail Offer, to provide retail investors in the United Kingdom with an opportunity to participate alongside the Placing. The Retail Offer is not made subject to the terms and conditions set out in Appendix 1 to this Announcement, and instead a separate announcement will be made shortly regarding the Retail Offer and its terms. Members of the public are not entitled to participate in the Placing. The Retail Offer is conditional on the Placing, but the Placing is not conditional on the Retail Offer.
In addition to the Placing and the Retail Offer, certain directors of the Company have agreed, conditional on the Placing, to subscribe for the Subscription Shares at the Placing Price representing c. £230k in aggregate. The Subscription Shares will be subscribed for pursuant to subscription letters entered into between the relevant directors and the Company, rather than pursuant to the Terms and Conditions of the Placing.
The Placing Shares, the Retail Offer Shares and the Subscription Shares in aggregate will represent up to 10% of the current issued share capital of the Company.
The Company will rely on the allotment authority and on the disapplication of pre-emption rights authorities, granted by shareholders of the Company at its annual general meeting held on 30 April 2026, for the Placing, the Retail Offer and the Subscription. The Placing will be made on a non-pre-emptive basis.
The price at which the Placing Shares are to be placed will be determined at the close of the Bookbuild by agreement between the Company and the Banks. The timing of the closing of the Bookbuild, the Placing Price and the number of Placing Shares to be placed will be agreed between the Banks and the Company following completion of the Bookbuild and will then be announced as soon as practicable on a Regulatory Information Service.
The Banks have today entered into an agreement with the Company under which, subject to the conditions set out therein, the Banks as agents, for and on behalf of, the Company have agreed to use their respective reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing is subject to the terms and conditions set out in Appendix 1 to this Announcement. The Placing is not conditional upon the Retail Offer or the Subscription. For the avoidance of doubt, the Banks are playing no role in connection with the Retail Offer or the Subscription.
A description of certain relevant aspects of the Placing Agreement can be found in the Terms and Conditions contained in Appendix 1 to this Announcement under the headings “Details of the Placing Agreement and of the Placing Shares”, “Conditions of the Placing”, “Termination of the Placing Agreement” and “Restriction on further issue of securities”.
Prior to launch of the Placing, the Company consulted with a number of its shareholders to gauge their feedback as to the terms of and potential participation in the Placing. The Board has concluded that the Placing is in the best interests of shareholders and wider stakeholders and will promote the long-term success of the Company and has chosen to proceed with the Placing. The Placing is being structured through the Bookbuild to minimise execution and market risk. The Board intends to apply the principles of pre-emption when allocating Placing Shares to those shareholders that participate in the Placing.
Due to the accelerated nature of the Acquisition, approval to inward list all of the Placing Shares, Retail Offer Shares and Subscription Shares on the Main Board of the securities exchange operated by the JSE Limited from the Financial Surveillance Department of the South African Reserve Bank has not yet been obtained. The application for SARB Approval was submitted on 19 June 2026 by Investec in its capacity as the Company’s Authorised Dealer. SARB Approval is at the discretion of the Financial Surveillance Department of the South African Reserve Bank and it is expected that confirmation as to whether SARB Approval has been obtained will be known no later than the end of August. Accordingly, transfers between the London Stock Exchange and the Johannesburg Stock Exchange of: (i) the Company’s ordinary shares; and (ii) following First Admission, the UK Placing Shares; and (iii) following the admission to trading on the main market for listed securities of the London Stock Exchange plc of the Retail Offer Shares and Subscription Shares, will be suspended from today until Second Admission.
Applications will be made for those Placing Shares, if any, other than the SA Placing Shares, as may be, if agreed between the Banks and the Company, specified in the executed Terms of Placing to be admitted to:
(a) trading on the main market for listed securities of London Stock Exchange;
(b) listing on the Official List of The Irish Stock Exchange plc, trading as Euronext Dublin and to trading on the main market for listed securities of Euronext Dublin,.
Applications will also be made for those Retail Offer Shares and Subscription Shares, if any, to be admitted to trading on the main market for listed securities of London Stock Exchange and listing on the Official List of Euronext Dublin and to trading on the main market for listed securities of Euronext Dublin.
Applications will be made, subject to receipt of SARB Approval, for:
(a) those Placing Shares, if any, which are placed with placees who are South African Qualifying Investors, as may be, if agreed between the Banks and the Company, specified in the executed Terms of Placing (the “SA Placing Shares“) to be admitted to:
(i) trading on the main market for listed securities of London Stock Exchange;
(ii) listing on the Irish Official List and to trading on the main market for listed securities of Euronext Dublin; and
(iii) listing and trading as a secondary inward listing on the Main Board of the JSE; and
(b) any UK Placing Shares to be admitted to listing and trading as a secondary inward listing on the Main Board of the securities exchange operated by the JSE.
Subject to receipt of SARB Approval, applications will also be made for those Retail Offer Shares and Subscription Shares, if any, to be admitted to listing and trading as a secondary inward listing on the Main Board of the JSE.
It is expected that settlement of subscriptions in respect of the UK Placing Shares (subject to the First Admission becoming effective) and any Retail Offer Shares and Subscription Shares (subject to Retail Offer Admission and Subscription Admission, as applicable), and trading in the UK Placing Shares, Retail Offer Shares and Subscription Shares on the London Stock Exchange and Euronext Dublin, will commence at 8.00 a.m. (London time) / 9.00 a.m. (Johannesburg time) on 4 August 2026.
Second Admission is subject to receipt of SARB Approval and a long stop date of 3 September 2026. Further announcements will be made by the Company at the appropriate time, as and when required.
The Placing is conditional upon, inter alia, admission of the UK Placing Shares becoming effective not later than 8.00 a.m. (London time) on 4 August 2026 (or such later time and/or date) as the Banks may agree with the Company) and the Placing Agreement not being terminated in accordance with its terms before that time. Further details can be found in Appendix 1 to this Announcement.
The above proposed dates and times may be subject to change at the discretion of the Company and the Banks.
The Placing Shares will, when issued, be credited as fully paid and rank pari passu with the existing Ordinary Shares in the capital of the Company including the right to receive all future dividends and distributions declared, made or paid.
The Company has undertaken to the Banks that, between the date of this Announcement and 90 calendar days after the date of First Admission, it will not, directly or indirectly, issue or allot Ordinary Shares, subject to customary exceptions or waiver by the Banks.
Appendix 1 to this Announcement (which forms part of the Announcement) sets out the Terms and Conditions of the Placing. Persons (including individuals, funds or otherwise) choosing to participate in the Placing and by making an oral or written offer to subscribe for Placing Shares will be deemed to have read and understood this Announcement in its entirety (including the Appendices) and to be making a legally binding offer subject to the terms and conditions in it, and to be providing the representations, warranties and acknowledgements contained in Appendix 1.
