UK property group Hammerson, which has a half stake in Dundrum Town Centre in Dublin, wrote down the value of its Irish properties by a further 5.5 per cent last year against the backdrop of rising interest rates.
The value of the Irish portfolio, which also includes 50 per cent stakes in the Ilac Centre in the city and Pavilions shopping complex in Swords, north Co Dublin, declined by £37.5 million (€43.7 million) to £630 million, Hammerson said on Thursday as it reported results for 2023.
The group had booked a total of £239 million of revaluation losses against the Irish flagship portfolio over the previous three years, driven mainly by the effects of the Covid-19 pandemic on shopping habits globally.
News of the latest assets revaluation comes as Hammerson and its 50:50 Dundrum joint venture partner, Allianz Real Estate, are seeking to refinance €600 million of loans secured against the centre, which fall due in September. Hammerson said that refinancing talks “are progressing”.
Hammerson also reduced the value of assets in its so-called developments and other portfolio across the UK and the Republic by 10.5 per cent to £280 million. This portfolio includes a 50 per cent interest in residential schemes in Dundrum, a mixed-use scheme planned for its landmark O’Connell Street site, and land in Swords.
Hammerson said footfall continued to recover across its retail assets in the UK, France and Republic last year, with Irish levels increasing by 4 per cent. Still, group footfall levels remained 10 per cent below where they stood in 2019, before the pandemic.
[ Dundrum shopping centre owner challenges local area plan in High CourtOpens in new window ]
Irish retail occupancy levels stood at 96 per cent at the end of last year, helped by the opening a year ago of Brown Thomas in the former House of Fraser unit in Dundrum.
On the Irish development front, Hammerson and Allianz Real Estate continued construction on a 122-unit apartment scheme in the South Dublin suburb last year. Their plans to build hundreds of apartments on the site of the old shopping centre in Dundrum remains subject to planning permission.
Why did Bank of Ireland shares plummet despite record profits?
Hammerson said it expects “initial planning consents” to be finalised in 2024 for the Dublin Central scheme on O’Connell Street. The group is in “ongoing discussions with potential end users”, it added. A €500 million development price has been put on the massive mixed-use scheme.
The redevelopment plan includes 9,300sq m (100,100 sq ft) of shops, restaurants and cafes, 43,000sq m (463,000sq ft) of office space, 97 new homes, up to 210 hotel rooms and a new public gallery.
Hammerson also owns a 41 per cent stake in the Kildare Village designer outlet shopping destination, which sits within the UK group’s Value Retail division. The group, which has said that Value Retail is a noncore asset, was reported in November to be in talks to sell the unit for about £1 billion.
The wider Hammerson group has been focused in recent years on selling off noncore assets to pay down debt.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
