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.
Hammerson owns the Brent Cross shopping centre in London, as well as Bullring shopping centre in Birmingham.
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.