Global investor Orion has signalled it will not complete its deal to buy Hammerson’s portfolio of seven retail parks, and it is prepared to forfeit a £21m deposit rather than go ahead with the deal which was agreed before the pandemic struck in February 2020.
Orion European Real Estate Fund V had exchanged unconditional contracts to buy the seven retail parks for a headline price of £400m with completion due on April 23. But as the deadline approached Orion notified Hammerson that it did not intend to complete the transaction.
The parks included in the portfolio are: Central retail park, Falkirk; Cleveland retail park, Middlesbrough; Cyfarthfa retail park, Merthyr Tydfil; Elliott’s Field shopping park, Rugby; Forge shopping park, Telford; Ravenhead retail park, St Helens and the Orchard centre, Didcot.
Under the terms of the sale agreement Hammerson will serve a notice to complete on Orion specifying a final deadline of May 6. If Orion still fails to complete the £21m deposit, which is currently held in escrow, will become payable to Hammerson.
While the cash will be useful in the short term, the collapse of the deal will be a blow for Hammerson’s strategy of fixing its balance sheet with selective disposals.
