Hammerson to convert former Debenhams flagship into housing, shares rally

The real estate investment trust, a specialist in retail properties, said on Tuesday that it had submitted plans to redevelop the former store at its Highcross shopping centre into 300 residential units, all of which will be available for rent.

Hammerson has submitted the application in conjunction with Packaged Living, a specialist in the private rental sector founded in 2018 and backed by investment management firm Fiera Real Estate.

Mark Bourgeois, Hammerson’s UK and Ireland managing director, said: "Since opening its doors in 2008, Highcross has firmly established itself as an integral part of Leicester’s city core.

"While the structural shift in retail and changing consumer shopping habits have meant that destinations such as Highcross need to adapt their offer and mix of uses, well-connected city centre locations such a this will always be places where people want to be."

As at 1245 GMT shares in Hammerson had rallied 14% to 42.13p. Trading was strong across London REITs, with Land Securities ahead 4% at 707.5p, British Land up 4% at 527.36p and Great Portland Estates 2% firmer at 696.2p.

Hammerson has been hit hard by the impact of Covid-19, with non-essential shops forced to close for much of 2020. However, its portfolio - which includes Birmingham’s Bullring and London’s Brent Cross - was under pressure before the pandemic, facing weak consumer confidence and an ongoing shift away from bricks and mortar in favour of online shopping.

Last week it reported a doubling in its annual loss, as the value of its properties fell and rental income plunged.

Department store chain Debenhams, meanwhile, went into liquidation in December, just days after high street giant Arcadia collapsed into administration.