EUROPE - Pension fund asset manager APG has agreed to help listed real estate company Corio raise enough capital to acquire more than €1.3bn worth of retail assets in Europe.
Corio has announced it is seeking to raise €600m of equity by offering new ordinary shares, of which APG has agreed to buy more than one third.
Retail property developer Multi Corporation has agreed to sell Corio four operational shopping centres in Germany, Spain and Portugal for €662m, as well as a portfolio of German retail developments worth approximately €660m.
Corio is planning to complete the acquisition through the new capital raising exercise and existing bank facilities.
Not all of the €600m capital raised will be directed towards the acquisition, with approximately €150m intended to be used for other existing and future projects, and "general corporate purposes".
APG currently holds a 36.8% interest in Corio and has entered into a commitment to participate pro-rata in the share offering so it can maintain its current stake of more than a third.
APG said it would not comment on specific companies but revealed that decision was not simply an automatic rebalancing of its current stake in Corio.
The four operational shopping centres are Forum Duisburg and Centrum Galerie Dresden in Germany, Espacio Torrelodones in Spain, and Espaço Guimarães in Portugal.
The development projects in Germany include Schloßstraße in Berlin, Quartier an der Stadtmauer in Bamberg, Arneken Galerie in Hildesheim, and Königsgalerie in Duisburg.
Corio will acquire a 100% interest in the assets based in Spain and Portugal, but will allow Multi Corporation to retain a 5.01% interest in the German assets, although Corio has a call option to acquire this stake.
The portfolio acquisition will effectively add a new home market to Corio's existing pan-European coverage, giving it a presence in the four largest continental European consumer markets.
The size of the transaction will allow Corio to immediately build, through the transfer of Multi Corporation's established centre management organisation, a local business unit in Germany in line with Corio's existing business model.
The assets in Spain and Portugual will also help increase Corio's portfolio weighting to 95% retail, which is the property sector the company is focusing on.
Gerard Groener, chief executive at Corio, said: "This transaction gives Corio the opportunity to add continental Europe's largest consumer market to its portfolio and in addition team up with Multi, the leading shopping centre developer in Europe.
"Our increased pan-European presence together with the newly formed Multi partnership will position Corio uniquely for future growth opportunities."