NETHERLANDS - Property investor and manager Corio is looking to increase its 6% allocation in emerging markets real estate to 20%, in a bid to maximise the differentials between emerging and mature markets.
Following a strategic review, the company with €7.3bn in assets under management has decided "to add value by using its expertise to create opportunities from the spin-off in the regions it has entered successfully", according to officials in the firm's first half report.
"We want to use our experience from entering Turkey to extend our business in countries such as Bulgaria, Romania and Ukraine," said Ingrid Prins, investment relations manager, to IPE.
Corio has already bought a ‘football pitch-sized' plot of land in Bulgaria's capital Sofia, she added.
But the company has now revealed it wants to enhance its focus on retail centres as its core business, in order to become a pure play investor and manager.
Once the asset manager finalises the sale of its Dutch offices and industrial portfolio - scheduled for completion at the end of September - Corio's retail stake will increase to 92%, and will grow to almost 100% after the intended sale of its equivalent portfolio in France, which currently counts for approximately 6% of the company's assets.
"We strongly believe that in-house managing is the way to success in the shopping centre business, as local expertise is crucial in sourcing and executing a retail property portfolio," officials said.
Corio's net rental income from continuing operations rose by 16.8% to almost €144m, while its like-for-like net rental growth was 5.9% for the entire continuing portfolio and 5.8% for the retail portfolio, the company revealed, adding the average occupancy rate increased by 0.3% to 96.6%.
While property valuation increased in the Netherlands, Italy and Turkey, a revaluation of the continuing portfolio amounted to €7.7m, compared to €235m in the first half of last year, according to the property investor as the value of properties in France and Spain has decreased.
The fixed pipeline business also decreased by €642m to €1bn of a total pipeline of just over €3bn, the company indicated, largely because of an allocation to the investment portfolio of the new retail centres Grand Littoral in Marseille and Pieter Vreedeplein in Tilburg.
Corio recently acquired a shopping centre in Iskenderun as well as a retail centre development project in Tarsus, both in Turkey and made two similar acquisitions in Turkey in May.
And earlier this year, Corio founded a Dutch subsidiary - Corio Development Company - responsible for the total pipeline in the Netherlands, which consists mainly of the redevelopment of standing investments.
The company said it expects net rental income to rise by 14% this year, while it anticipates an increase of financial expenses to €27m during in 2008.
Corio invests in dominant shopping centres in the Netherlands, France, Spain, Italy and Turkey and is said to follow a ‘buy and hold' policy.