British shopping centers owner Hammerson has agreed to buy smaller rival Intu Properties for about £3.4 billion ($4.56 billion) to create a pan-European real estate giant controlling assets worth £21 billion.
The idea behind the deal was to shift focus to other countries in Europe even as UK shopping malls witnessed weak sales and a slowdown perpetuated by the growing prominence of online shopping.
Recently, over 350 stores have been identified for closure – including Toys R Us, and Debenhams. Add to this the collapse of BHS last year and banks and malls are all set to trim real estate portfolios as more customers move online.
According to a report in The Guardian, the merged Intu and Hammerson group plans to sell at least £2 billion of assets to strengthen its balance sheet and allow it to reinvest in other, higher return opportunities.