The Orion European real estate fund looks set to pull out of a deal to buy Hammerson’s £400 million retail park portfolio.

The shopping centre owner said it “did not intend to complete” the transaction agreed on 21 February for seven of its UK retail parks, but it “remains ready and able to comply with completion obligations” and is in ongoing discussion with Orion.

The deal was expected to be finalised this week, but if Orion does pull out, Hammerson will “serve a notice to complete” no later than 6 May.

If that second deadline passes, Hammerson would cancel the deal and be paid the £21 million deposit sent by Orion.

Last month, Hammerson stated that it had only been paid 37 per cent of the rent that was billed in the UK for the second quarter of the financial year. After stripping out rent that has been waived, deferred, or switched to monthly payments, that rose to 57 per cent of what was due.

It is one of several retail property owners struggling amid the Coronavirus lockdown, which has stripped further rental income from an already insecure market.

Earlier this month, Intu said it was preparing to take action against tenants which have not paid their rent and service charges, while Westfield’s UK shopping centres saw like-for-like rental income down by 3.1 per cent, attributing the decline to a vacancy rate of 8.7 per cent, caused by many businesses shuttering shops.

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