Listed Dutch retail specialist Corio, which is set to be taken over by French peer Klépierre, saw its net rental income fall 0.6% in the first six months of 2014 compared with a 4.4% decline in the year-earlier period.

Listed Dutch retail specialist Corio, which is set to be taken over by French peer Klépierre, saw its net rental income fall 0.6% in the first six months of 2014 compared with a 4.4% decline in the year-earlier period.

The company said its operating performance continued to improve across the board thanks to its strategy of focussing on dominant shopping centres (Favourite Meeting Places) and disposing of non-core assets.

Since early 2013, Corio has sold 31 assets to a number of buyers for a total €638 mln and the portfolio now consists almost entirely of core assets in strategic locations, the company said.

Corio’s direct result amounted to €122.6 mln, or €1.24 per share, in the first half, and the company expects to arrive at a figure of between €227 mln and €233 mln (or €2.28 and €2.34 per share) for the full-year 2014.

Commenting on the results, Corio CEO Gerard Groener said: ‘Looking back at Corio's operational performance during the first half of 2014, I'm pleased to be able to conclude that the trend of quarterly improvements of our operating metrics has continued. Both our key performance indicators (KPIs) such as footfall and sales as well as financial metrics such as re-letting and renewals and the like-for-like performance showed an upward trend. And we expect this trend to continue.’

TAKEOVER
French mall operator Klépierre announced last week that it had reached agreement on a takeover of Corio in a deal valuing the Dutch company at €7.2 bn including debt. The tie-up will take the form of a share deal, with Klépierre taking over 100% of Corio’s ordinary shares. The new €21.3 bn combine will be the second-largest retail property company in Europe after Unibail-Rodamco which has gross shopping centre assets of €26.8 bn.

At the presentation of the H1 results, Groener described the merger as ‘an exciting step’ which will ‘accelerate’ the upward trend in Corio’s performance. ‘I am confident that the combination will play an important role in the further consolidation of the European real estate investment industry,’ he said. ‘Both companies firmly believe that all our stakeholders will benefit from the proposed transaction. Size is becoming an increasingly decisive factor in the retail property market in order to create attractive shareholder returns over the long term and being able to compete for larger high-performing retail properties.’

He continued: ‘The combined group is geographically complementary and will benefit from significant scale advantages, synergies and a solid financial position. The combination will be able to offer 180-plus locations to the leading retail brands in order to expand their business.’

Click on the related stories below to read more about the proposed Klépierre-Corio merger