Corio acquires part of Multi's portfolio for EUR 1.3b

Listed retail property investor Corio said on Thursday that it has agreed to acquire operational shopping centres and development projects from Multi Corporation for EUR 1.3 bn.

The deal, which was first signalled in mid-December last year, covers four operational shopping centres in Germany, Spain and Portugal. Corio is acquiring these assets for a consideration of EUR 662 mln, representing a net initial yield of 6.7%. The company is also purchasing the five German developments for about EUR 660 mln. Multi said the deal related to 15% of its operational and development portfolio. Multi will retain a 5.01% interest in the German assets in which it owned 100%, while Corio is acquiring a 100% interest in the Spain and Portuguese assets.

Corio also announced an offering of up to EUR 600 mln in new shares. About EUR 450 mln will be used to partially fund the acquisition while the remainder will be used for other, existing and future pipeline projects and for general corporate purposes, the company said.

APG Algemene Pensioen Groep, acting in its capacity of Dutch pension fund asset manager, has entered into a commitment to participate in the offering, pro-rata to its current holding of approximately 36.8%.

Corio's leverage ratio will remain at 40%.

Gerard Groener, CEO of 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'.

The operational assets acquired are Forum Duisberg and Centrum Galerie in Dresden in Germany; Espacio Torrelodones in Madrid, Spain and Espaco Guimaraes in Guimaraes, Portugal. The developments are Schlossstrasse in Berlin; Quartier an der Stadtmauer in Bamberg; Konigsgalerie, Duisburg and Arneken Galerie in Hildesheim. Corio and Multi each have a reciprocal right of first offer on any new German development project for a period of five years. In addition, Corio has the option to acquire two further development projects, Forum Roma in Rome and Espacio Canavarel in Madrid within two years.

The transaction adds Germany as the sixth home market Corio is active in alongside the Netherlands, France, Italy, Spain/Portugal and Turkey. The value of Corio's operational portfolio increases from EUR 5.9 bn at end-December last year to EUR 6.5 bn. The addition of the German projects lifts the fixed committed pipeline from EUR 700 mln at the end of last year to EUR 1.1 bn now.

Hans van Veggel, management board chairman of Multi Corporation, said: 'This transaction is of strategic importance for the ongoing financing and development of Multi's project pipeline. It also means a strategic relationship with a leading owner of property. This strong partnership guarantees the right synergy between investment and development expertise to enable a further optimalisation of quality projects.'

Jones Lang LaSalle acted as property advisor to Corio in relation to the transaction.

J.P. Morgan acted as financial advisor and De Brauw Blackstone Westbroek as legal advisor to Corio. Loyens & Loeff provided tax advice.

Multi's advisers are Allen & Overy. John Carrafiell (via Stenton RE) acted as consultant to Multi. Morgan Stanley & Co is providing financial advice to Multi.

See the April edition of PropertyEU Magazine for an in-depth interview with Corio CEO Gerard Groener and Hans van Veggel of Multi Corporation