Hammerson, the London-listed retail property company and owner of Dundrum Town Centre, has had a very good week.
To put this in context, good news and retail property are not words that have gone together often over the last 15 years, but the dramatic turnaround of Hammerson under its chief executive Rita-Rose Gagné has earned it deserved plaudits.
Now it can get back into growth trajectory, and Ireland is likely to play a big role in delivering this growth.
The first bit of good news, announced before markets opened on Wednesday, saw the completion of Hammerson’s disposal of its stake in Value Retail, the fashion outlets group that includes Kildare Village. This sale, generating proceeds of around £600 million has brought financial stability after eight difficult years, and the capacity to fund its refreshed destination strategy.
This landmark sale, one of the largest retail property transactions in years, has helped reduce net debt significantly, improving its financial metrics, including a lower loan-to-value ratio (25 per cent) and reduced leverage.
With the Dundrum refinancing complete, Hammerson has no major refinancing needs until 2027, enhancing its ability to raise new capital on favourable terms as rates come down.
This strengthened Hammerson’s balance sheet, and has enhanced liquidity and flexibility for future investments. Timing of this cash injection couldn’t be better, with prime retail and the wider commercial property market on an upward curve.
The exit from Value Retail allows Hammerson to focus on its now core strategy of transforming its retail destinations and mixed-use properties, streamlining operations and redeploying capital into higher-growth opportunities. This also supports long-term shareholder returns and business sustainability.
We have seen early examples already, with The Ironworks residential scheme, adjacent to the shopping centre, adding a much needed 107-units to the Dundrum area. Expect more of this to come now that Hammerson has the firepower to transform its destinations.
The second bit of good news came on Thursday as An Bord Pleanála granted final planning permission for Hammerson’s transformative Dublin Central development on O’Connell Street, more than two years since the project was appealed.
When Hammerson entered the Irish market in 2015, it was through a major acquisition known as Project Jewel. This portfolio included a 50 per cent stake in Dundrum Town Centre, as well as stakes in Swords Pavilions and the Ilac Centre in Dublin. Hammerson acquired these assets from Nama as part of a consortium with German insurance company Allianz Real Estate (now PIMCO), with the deal valued at approximately €1.85 billion.
The acquisition of Project Jewel represented a strategic move for Hammerson, seeking to expand its retail footprint in a recovering Irish economy post the 2008 financial crisis. Dundrum, in particular, provided high-quality retail income in a prime location with strong, and affluent, consumer demand. The deal allowed Hammerson to leverage its expertise in managing premium retail destinations, enhance its European portfolio, and benefit from the Irish retail market’s growth potential.
The deal also included a difficult and infamous site on O’Connell Street comprising the former Carlton Cinema, the former Dublin County Council offices, and a wide number of smaller plots and properties between Moore Street, Henry Street, Parnell Street and O’Connell Street.
This site had been painstakingly assembled by Chartered Land during the Celtic Tiger years, but like with Hammerson, struggled with planning and eventually was a victim of the global financial crisis.
The planning grant for Hammerson is a milestone. It marks the culmination of years of planning, consultation and indeed frustration, clearing the path for a dynamic mixed-use project, one of Dublin’s largest ever, that will breathe new life into this collection of long vacant and neglected sites.
With this approval, Hammerson has the potential to deliver a vibrant blend of retail, residential, hotel, and office spaces, alongside significant heritage conservation work. The project will revitalise the north inner city and arrest the decline of O’Connell Street.
The progress on Dublin Central is a major success for Hammerson. The redevelopment of this 5.5-acre site will have a significant impact on an area which has suffered from underinvestment and dereliction for years. Some parts of the site have been vacant for over 50 years, with the majority vacant for at least 20 years.
Delays and frustrations had built up with multi-planning applications, proposals and objections over the last two decades. Many would argue that it has been Dublin’s most difficult planning application in years, and a major test for the ability to bring in private capital to regenerate difficult parts of the city.
For Hammerson, the Dublin Central redevelopment not only represents a successful navigation of Ireland’s complex planning, political, and regulatory landscape but also a major investment in the city’s future, with Ireland now making up a significant portion of the group’s activities.
By transforming a long-neglected site, Hammerson is contributing to the regeneration of a key urban area, aligning with the city’s broader ambitions for sustainable growth and urban renewal.
