LONDON, May 13 (Reuters) - UK property company Hammerson (HMSO.L) said on Wednesday it would get gross proceeds of 70 million euros ($95.54 million) from the sale of its remaining property in Germany, a Berlin shopping centre.
“The proceeds of the sale will be used to reduce group borrowings,” Hammerson Chief Executive John Richards said.
Hammerson said it had exchanged contracts for Forum Steglitz with Europa Fund III, a pan-European investment fund launched by Europa Capital III, Hammerson said in a statement.
The gross proceeds equated to a net initial yield of 8 percent. Transaction costs are expected to be about 1 million euros, Hammerson said.
The sale of the 32,000-square-metre shopping centre will cut Hammerson’s administration costs by about 600,000 euros a year.
Forum Steglitz was valued at 93.1 million euros on Dec. 31, 2008. In 2008 produced net rental income of 3.8 million euros.
By 1434 GMT, Hammerson’s shares were down 9.5 percent at 292 pence, while the FTSE 350 Real Estate index shed 7.7 percent. (Reporting by Andrew Macdonald; Editing by Jon Loades-Carter) ($1=.7327 Euro)