Property group Hammerson (HMSO) wants to sell £1.9bn worth of assets by the end of 2019 as it tries to streamline its focus on flagship retail destinations and premium outlets.

It intends to exit all retail parks over the medium term and won’t go ahead with expanding the Brent Cross shopping centre for now, citing heightened market risks.

The new strategy will also see it obtain greater geographic diversification with non-UK retail exposure increasing by approximately 10%.

The big concern for investors is that asset valuations will have to be marked down, particularly as Hammerson is now seen as an eager seller of properties and so potential buyers may try to strike a bargain. Ongoing retail sector weakness is also likely to lead to lower asset values.

The company earlier this week sold two retail parks for £164m which is 10% below book value.

Stockbroker Numis says Hammerson is entering a period of ‘heightened execution risk’ and it sees limited reason to invest in the shares at present.

The broker has particular concerns about Hammerson's UK shopping centre assets, where the market is much less liquid and where values haven’t been written down significantly yet. (DC)

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