Many retailers are having profits squeezed by high rents, increased rates and the introduction of the living wage for employees. Yet one of the UK’s largest shopping centre owners, Hammerson, believes in the future of shopping centres.
Hammerson is purchasing its main rival Intu to create Britain’s largest shopping centre group worth £7.3 billion.
The newly formed group will own high-profile shopping centres including the Bullring in Birmingham, The Arndale and Trafford Centres in Manchester and the Lakeside Centre in Essex.

Intu shares have been trading at a low price point, and this has meant that Hammerson can acquire the shares at a reasonable price.

This deal highlights the state of shopping in the UK. High streets are losing business, but Hammerson believes that the future of retail is large shopping centres that combine shopping with dining and entertainment. Some of their shopping centres are located in city centres, but many are located outside of town centres, and often have free parking to attract customers.

The shopping centres doing well are in or near major cities, with secondary sites not as profitable.

The Competitions and Market Authority could block the takeover, but if the deal goes ahead then the ownership of prime shopping centres could de be dominated by Hammerson, with smaller companies or individual commercial property landlords finding it more difficult to acquire profitable sites.

Commercial mortgages are readily available to purchase retail premises but investors need to carefully choose the location of shops that they want to purchase, and be convinced that they can attract long term tenants.