European retail specialist Corio intends to dispose of about 20% of its shopping centre assets, valued at EUR 1.4 bn, over the next three to four years as it focuses on its Favourite Meeting Places (FMP) strategy across its pan-European porfolio.
European retail specialist Corio intends to dispose of about 20% of its shopping centre assets, valued at EUR 1.4 bn, over the next three to four years as it focuses on its Favourite Meeting Places (FMP) strategy across its pan-European porfolio.
Retail accounts for 98% of the company's EUR 7.3 bn in assets. The shopping centre assets have been assigned to either a FMP portfolio or a portfolio of traditional retail centres.
The Amsterdam-listed real estate company will work to increase the quality and accelerate income growth of the FMPs, which make up 80% of the portfolio value. The remaining 20% - designated as traditional retail centres (TRC) - will be disposed of over time.
Proceeds from disposals will be used to reduce leverage to a target range of 35% to 38%, and to fund the pipeline. Corio expects an overall net rental income growth for the FMP portfolio of between 4% and 6% per year on average.
FMPs are typically located at transportation hubs or in the heart of a community. TRCs may be well-performing centres but cannot fully adapt to the FMP concept, Corio said. These centres focus on daily needs, are purely convenience-based and often smaller assets.
CEO Gerard Groener said: 'Analysing the market dynamics, Corio sees the need to adapt to the changing retail environment and regards further specialisation as key to enable maximizing shareholder value. The favourite meeting place concept links this shareholder value with servicing consumers and integrating CSR'.
