Following the news that shopping centre owner Hammerson is no longer urging its shareholders to vote in favour of its acquisition of rival Intu, Sofie Willmott, Senior Retail Analyst at GlobalData, commented:
‘‘Following negative investor reaction, an abundance of retailer struggles in the first quarter of 2018 and two failed takeover bids by European shopping centre landlord Klépierre of its own company, Hammerson has retracted its offer to purchase Intu this morning.’
‘‘With little positive news across the retail since the start of 2018 including multiple CVAs from New Look, Select and Carpetright and major players Toys R Us and Maplin tumbling into administration, Hammerson is unwilling to expose itself to the potential of retailers closing stores in Intu’s shopping centres, at the price it settled on five months ago. Although many retailers have plans to trim down their store portfolio this year in response to lacklustre physical sales, rising operating costs and spend shifting online, it is unlikely that shopping centre stores will be the ones they choose to close given the destination appeal of these locations. Retailers such as Zara, H&M and River Island are prioritising their shopping centre locations and upsizing their stores in supermalls (large shopping centres over 20m sq ft that attract 20m+ visitors annually) adding to the lure of these locations which offer an all-round experience for consumers with increasingly high expectations.’
‘‘Though Hammerson has abandoned the deal in order to protect its own interests and reduce the risk given the tough retail climate, both shopping centres owners will be better protected from changing consumer spending habits in comparison to landlords of other retail locations, namely town centres. GlobalData forecasts *spend in supermalls to outpace growth in town centres over the next five years as consumers continue to gravitate towards experience-led destinations with a broad retail and leisure offer.’’
