The Bullring and Brent Cross owner confirmed this morning it was considering tapping shareholders alongside the sale of its stake in European joint venture Via Outlets.
Liberum says Hammerson’s problem is that it owns too much out-of-favour retail, particularly in the UK, where values are falling fast.
On the broker’s forecast, Hammerson still ends the year with a 47% loan-to-value ratio and on its calculations, Hammerson likely needs £1.3bn in new funding.
Reports over the weekend suggested the property group might be looking to raise £500-600mln, but Liberum believes this is toward the lower end of what the business needs.
Liberum also asks who might be interested in buying the shares.
Existing shareholder and partner APG will be supportive says the broker, but the broker questions why who would buy into a company whose assets are so out of favour.
“It is larger UK Shopping Centres where values are falling fastest,” said the broker.
“Our 30p target price is based on an average of two rights issue scenarios, both of which will be highly dilutive to the current equity.” Sell is its rating.