Hammerson takes full control of The Oracle, upgrades EPRA earnings, and leans into growth
Hammerson has bought the remaining 50% of The Oracle, Reading, from ADIA for a headline £104.5 million, while upgrading 2025 earnings guidance and flagging strong trading. It is the fourth JV buyout in a little over a year, and it comes with a chunky stabilised yield of 8.9% and an expected c.5% boost to the Group’s FY26 EPRA earnings.
In plain English: Hammerson is doubling down on a centre it knows well, it is leasing space at punchy terms, and it has nudged earnings guidance up again. There is more balance sheet work to do, but today’s mix of acquisition economics, trading momentum and refinancing progress is notably positive.
Why The Oracle deal matters
The Oracle is performing and being repositioned. After repurposing the former House of Fraser to TK Maxx and Hollywood Bowl, Hammerson is now lining up flagship upsizes for Zara and Apple in H1 2026. Year to date, 30 deals have been exchanged representing £4.5 million of headline rent (about £21 million to first break), and occupancy has risen from 93% to 97%.
Footfall and sales are moving the right way: Q3 like-for-like footfall up 10% year-on-year and up 3% year-to-date; Q3 like-for-like sales up 3% quarter-on-quarter and up 17% since Q1. As previously underused space is filled, GRI is up 9% and NRI up 20% year to date, with the asset value up 11% since 2023. That is the backdrop to Hammerson paying a price that implies a stabilised yield of 8.9% (Q3 2025 net initial yield 7.2%, topped-up 7.5%).
There is also optionality still to come. The company is exploring retail, food & beverage, leisure and build-to-rent (BTR) options for the former Debenhams and the cinema block by the riverside – potential further value levers not yet baked into today’s numbers.
Guidance raised: EPRA earnings and GRI up
Hammerson has lifted FY25 guidance again. Total gross rental income growth is now expected at 19% (from 17%), with like-for-like gross and net rental income around 3%. EPRA earnings are now guided to “at least” £102 million (previously “around” £101 million). The company also reaffirms medium-term guidance for an 8-10% EPRA EPS CAGR, supported by the full-year benefit of recent acquisitions and the ongoing repositionings in 2026 and 2027.
Quick jargon buster: EPRA earnings strip out revaluation swings and other non-cash items, giving a clearer view of underlying profit. Like-for-like excludes asset-level changes so you see the pure operational trend. It is good to see both moving forward, with the Oracle acquisition adding further momentum into 2026.
Leasing momentum is doing the heavy lifting
Demand across the estate remains firm. Year to date the Group has signed 261 leases with £38 million of headline rent, equating to £190 million contracted to first break, at terms 49% ahead of previous passing rent and 12% ahead of estimated rental values (ERVs). The pipeline is healthy with about £26 million of headline rent, of which roughly £10 million is already in solicitors’ hands (as at 14 November 2025). Group occupancy stands at 95% and is expected to improve further with ongoing repositioning.
The UK is the standout, with deals representing £20 million of headline rent, 43% above previous passing rent and 16% ahead of ERV. That spread tells you retailers are prepared to pay for the right locations and formats, and supports rental growth into 2026.
Balance sheet: ratings up, refinancing in motion, costs contained
Two useful credit updates landed in October: Moody’s shifted the Baa2 outlook to positive and Fitch upgraded the Senior Unsecured rating to A-. Hammerson has begun early refinancing of its €700 million 1.75% 2027 bond via a new €350 million 3.5% bond, signed a new unsecured £100 million term loan maturing in 2028, and repaid the £338 million 3.5% bond due October 2025 from cash.
As a result – and including the Oracle purchase funded from cash – FY25 weighted average debt maturity is expected to be around 4.8 years with a weighted average debt cost of around 2.4%. Pro forma Q3 2025 LTV sits at about 37% and Net debt:EBITDA at roughly 9.0x, with an expected reduction to around 8x by FY26 as the recent acquisitions annualise. The Board’s through-the-cycle targets are Net debt:EBITDA of 6-8x and LTV around 35%.
Key numbers at a glance
| Oracle purchase price (remaining 50%) | £104.5m (headline, net of purchaser’s costs) |
| Oracle yield metrics | Stabilised 8.9%; Q3 2025 NIY 7.2%; topped-up NIY 7.5% |
| Oracle FY26 EPRA earnings impact | c.5% accretive to Group EPRA earnings |
| Oracle trading highlights | Occupancy 97% (from 93%); 30 deals, £4.5m headline rent; GRI up 9%, NRI up 20% YTD |
| Footfall and sales at The Oracle | Q3 LfL footfall +10% YoY; footfall +3% YTD; Q3 LfL sales +3% QoQ; +17% since Q1 |
| Group leasing YTD | 261 leases; £38m headline rent; £190m to first break; +49% vs passing, +12% vs ERV |
| Pipeline | c.£26m headline rent; c.£10m in solicitors’ hands |
| Group occupancy | 95% |
| FY25 GRI growth guidance | 19% (from 17%) |
| FY25 EPRA earnings guidance | At least £102m |
| Debt metrics (FY25 expected) | WADM ~4.8 years; WACD ~2.4% |
| Leverage (Q3 2025 pro forma) | LTV c.37%; Net debt:EBITDA c.9.0x (target 6-8x) |
My take: a high-return buyout with visible catalysts
Paying £104.5 million for the remaining half of a centre that is already showing double-digit rental and value growth looks shrewd. The 8.9% stabilised yield is attractive versus a 2.4% debt cost, and the c.5% FY26 EPRA earnings accretion is a clear near-term payoff. Add the Zara and Apple flagships, and there is a decent shot at further rental and valuation uplifts.
Group-wide leasing spreads – up 49% versus previous passing rent – confirm Hammerson’s strategy of focussing on prime, experience-led destinations is working. The nudge up to “at least” £102 million of EPRA earnings for 2025 is modest in pounds but meaningful in direction, and the reaffirmed 8-10% EPRA EPS CAGR keeps a medium-term growth narrative intact.
What to watch next
- Execution at The Oracle: leasing of the former Debenhams and the riverside cinema block, plus the impact of Zara and Apple openings in H1 2026.
- Pipeline conversion: c.£26 million of headline rent, with c.£10 million already in solicitors’ hands, will be key to lifting occupancy above 95% and supporting 2026 earnings.
- Refinancing progress: early action on the 2027 euro bond has begun with a €350 million issue; further steps and cost discipline will matter given leverage.
- Capital recycling: the Board sees opportunities for asset rotation, which could help nudge LTV toward the c.35% through-the-cycle target.
Risks and balance
Leverage remains elevated at around 37% LTV and c.9.0x Net debt:EBITDA on the Q3 2025 pro forma, albeit expected to fall to around 8x by FY26 as acquisitions annualise. Repositionings carry execution risk – especially in converting big-box legacy space – and macro conditions can affect footfall and retailer demand. None of that negates today’s good news, but it frames the path to the 6-8x leverage range the Board is targeting.
Bottom line
This update ticks three boxes: accretive acquisition, better trading, and proactive balance sheet management. The Oracle buyout at an 8.9% stabilised yield, rising occupancy and strong leasing spreads all support a firmer earnings base into 2026-27. If Hammerson can keep converting the pipeline and progress refinancing while recycling capital, the upgraded outlook has room to run.
