French retail giant Carrefour has joined forces with eight institutional investors to create a new property firm which will own €2.7 bn worth of shopping centres.
French retail giant Carrefour has joined forces with eight institutional investors to create a new property firm which will own €2.7 bn worth of shopping centres.
Well-informed market sources told PropertyEU that Carrefour is taking a 42% stake in the new shopping centre owner while its shareholder, private equity firm Colony Capital, insurers Predica and Cardif as well as US investment manager Pimco and Sogecap will hold the bulk of the remaining stake. None will hold more than 15% of the new company.
The new retail property company, which has yet to be named, is being financed with roughly €1.8 bn in equity and €900 mln in debt. It will remain unlisted for the time being, the sources said, and the company's results will be consolidated in Carrefour’s accounts.
The company has already acquired a total of 172 shopping malls which it plans to reposition, extend or redevelop. In the biggest of two deals, Carrefour's new unit has bought a portfolio of 127 Carrefour-anchored retail galleries in a €2 bn deal. The package, which is owned by Klépierre (83%) and insurer CNP (17%), comprises small to medium-sized retail galleries which Klépierre initially acquired from Carrefour in 2000 and 2001.
The second acquisition involved another 45 French malls with a value of €700 mln which Carrefour transferred to the new jointly-owned company. On completion of the deals, the new unit will own €2.7 bn of assets with over 800,000 m2 of retail space.
The move reflects a new strategy launched by CEO Georges Plassat aimed at increasing the control of the hypermarkets the group operates by owning and managing the surrounding sites and retail areas. ‘Carrefour has a view of what their consumers should experience when visiting their hypermarkets and adjoining sites. They have done a smart deal, in which they take control of the portfolio, share it with other institutional investors, and fork out a very limited amount of cash,’ commented a person close to the deal who wished to remain anonymous.