The owner of Cabot Circus is hoping to raise £800million in a bid to pay off debts and ride out the coronavirus crisis.
Hammerson is planning to sell a 50 per cent stake in its European shopping centre business VIA Outlets to partner APG, a Dutch pension fund, for £274 million. The listed company is also hoping to raise another £552million from a rights issue.
The move will help it pay down a massive debt bill, reducing it to around £2.2billion, according to the company.
Hammerson owns a string of large shopping centres and retail parks including Bristol’s Cabot Circus centre. It also owns 11 premium outlets in nine European countries, with 1,130 stores in total, giving it the third-largest portfolio by area on the continent.
But the company has been hit by a collapse in rental income from retailers in 2020 - and said it had managed to collect only 34 per cent of the rent it was due for the third quarter of the year.
Chief executive David Atkins said: "The pandemic has exacerbated structural shifts in retail, exerting further pressure on both property owners and brands and provided further evidence that the UK's historic leasing model has served its time," he said. "It is outdated, inflexible and needs to change."
Mr Atkins said the sector needed more flexible leases as well as setting rents at more affordable levels, and tying rents to an index, rather than the current system of reviews.
He also said there needed to be an "omni-channel top-up element", meaning connecting online shopping with physical stores.
"We are introducing a new UK leasing approach, one that is simpler, reflects an omni-channel retail environment and rewards positive performance on both sides," he said.
"It will deliver a sustainable, growing income stream and we are in initial discussions with retailers and anticipate introducing the first of the new leases later this year."
Hammerson said it had seen a “strong recovery” in France and Ireland, where footfall at its flagships and retail parks was only down 18 per cent last month compared to July last year.
But its UK portfolio relies more heavily on city centre sites which benefit from office workers and public transport links.
The domestic market was more subdued, it said, down 51 per cent in July compared to the same period last year.
Adjusted profit dropped by 84 per cent in the first half of the year to £17.7million on net rental income of £87.3million, down by 44 per cent.
