Shopping centre owners have weathered a difficult few years, with the rise of e-commerce, Covid and the cost of living crisis causing much grief for those with stakes in bricks and mortar retail.
There is cause for optimism, however, with private equity firm L Catterton’s acquisition of Hammerson’s £1.5bn stake in Value Retail – owner of the Bicester Collection – emblematic of increasing confidence in the sector, and raising hopes of a continued recovery in deal activity.
Slaughter and May advised Hammerson on the transaction, which generated approximately £600m in cash proceeds for the property firm, fielding a team led by corporate duo Simon Tysoe and Richard Smith.
Meanwhile, Latham & Watkins advised the buyers, with the sale handled through Silver Bidco Limited, a newly formed company incorporated in Jersey established by affiliates of L Catterton, which is part owned by luxury goods giant LVMH. The firm’s London team was led by corporate partners Tom Evans and Linzi Thomas.
The Bicester Collection comprises nine luxury designer outlet shopping centres located outside of major European cities including Barcelona, Paris and Milan. It includes the Bicester Village shopping centre which is located on the outskirts of the Oxfordshire town Bicester.
Rita-Rose Gagné, CEO of Hammerson, said in a statement that the disposal was a ‘transformational deal’ that removed an ‘overweight, low yielding and minority stake’ and ‘focuses our portfolio on prime urban real estate’.
Hammerson has in the past turned to Herbert Smith Freehills for many of its major corporate and real estate mandates, including the £277m disposal of its stake in premium outlet operator Via Outlets in Q4 of 2020, led by corporate duo Alex Kay and Mike Flockhart. Kay also led on Hammerson’s attempted £3.2bn buyout of Intu in 2018, a transaction that was ultimately abandoned.
Another sign of increasing bullishness in the retail space was seen last month with TDR Capital’s acquisition of Zuber Issa’s shares in Asda, a deal that took the private equity firm’s share in Asda to 67.5%. Kirkland & Ellis advised TDR, led by corporate partners Stuart Boyd and Jessica Corr alongside competition partners Alasdair Balfour and Joel Gory, while Cleary Gottlieb Steen & Hamilton acted for Issa.