Brent Cross owner in rights issue

Some 75% of Hammerson's business comes from retail real estate

Property firm Hammerson has said it hopes to raise �584.2m from investors in order to compensate for the slump in the UK commercial property market.

The company, which specialises in retail property investment and owns the Brent Cross shopping centre, needs to reduce its levels of debt.

It has been unable to raise sufficient cash through the sale of its assets.

Hammerson chairman John Nelson said the firm had seen a "marked deterioration" in property markets since August 2008.

'Sharp decline'

"The unprecedented conditions in financial markets worldwide and restricted availability of capital led to a sharp decline in real estate investment activity and values during 2008, particularly in the last few months of the year," he said.

Meanwhile, reports suggest British Land, another property investment firm, is also considering a rights issue.

The Royal Institution of Chartered Surveyors (Rics) said on Monday that demand for commercial property fell in the third quarter of 2008 - the fifth consecutive quarterly fall.

The worst hit sector was retail, with 78% more chartered surveyors reporting a fall than a rise in demand.

Hammerson has warned that it may breach its covenants in the future if the value of properties in its portfolio continues to fall.